Medicare chief Marilyn Tavenner said the new "Part B" premium for outpatient care will be $104.90 a month. In most cases, it’s deducted directly from a beneficiary’s monthly Social Security check. Currently the premium is $99.90 a month.
Earlier this year, the government projected an increase of as much as $9 for 2013, but health care inflation has remained modest.
Still, advocates for the elderly didn’t see much to cheer about, particularly since Medicare cuts are on the table in budget negotiations between President Barack Obama and Republicans in Congress. Obama has promised to protect beneficiaries, but even his plan calls for upper-income retirees to pay more.
"These increases aren’t as big as projected, but they are still increases," said Joe Baker, president of the Medicare Rights Center, a New York-based advocacy group. "Our fear is that as policymakers discuss deficit reduction, they’ll pile even more costs on to seniors."
High-income beneficiaries, those making above $85,000 a year individually or $170,000 for a couple, will face bigger increases. They will pay an additional $42 to $230.80 a month, depending on income. Most low-income beneficiaries have their premiums paid by Medicaid.
Tavenner also announced that Medicare’s hospitalization deductible will increase by $28, to $1,184. The deductible is the amount a person must pay before health insurance kicks in. Many seniors have some form of additional coverage to handle their Medicare hospital deductible.
The annual deductible for outpatient care will increase by $7, to $147.
Coverage for outpatient care under Medicare Part B is optional, but more than 90 percent of the program’s 52 million beneficiaries sign up. Medicare covers people 65 and older, the disabled and those with serious kidney disease.
Part B pays for office visits to doctors, preventive services and medical equipment. It’s a good deal by any measure, since 75 percent of the cost is borne by taxpayers, with premiums set to cover the remaining 25 percent. Still, many beneficiaries are on tight budgets so the monthly premium is a closely watched indicator.
Last month the government announced a 1.7 percent cost-of-living increase for the 56 million Americans on Social Security. That works out to raises averaging $19 a month come January. The typical increase for retired workers will be slightly larger.
Obama’s health care law reined in Medicare spending by curtailing payments to hospitals, insurers, drug companies and other service providers. Democrats want to focus the next round of cuts on providers, particularly pharmaceutical companies. But Republicans are looking for more significant changes in the program, such as increasing the eligibility age to 67.
The health care law improved preventive care for Medicare recipients and cut costs for people with high prescription drug bills. It also initiated a multitude of experiments on how to deliver quality care at lower cost for taxpayers. And it set up a cost control board to limit future increases in Medicare spending.