Sept. 7, 2004 - The increase in Medicare charges for 2005 that were announced Friday - just as a long holiday weekend began - drew new criticism aimed at the Medicare Modernization Act but most of the negative reaction came from parties who normally oppose administration policy. The timing may have blunted criticism from many off for the weekend. "This record high 17.3 percent Medicare premium jump is a body blow to millions of older Americans living on fixed incomes," said Robert M. Hayes, president, Medicare Rights Center of New York.
"Older Americans already are staggering under the relentless increases in the cost of prescription drugs. More older Americans will face harsh choices in meeting basic human needs - health, food and housing. Social Security increases for older Americans are likely to be less than three percent in 2005," added Hayes.
Stewart Grabel, ombudsman for the the Pima (AZ) Council on Aging, told the Tucson Citizen that the news just proves what advocates for seniors have been saying since the Medicare bill was up for a vote - "the devil is in the details."
"What we said when the Medicare Modernization Act came out is that everybody is talking about the new drug coverage benefit, which isn't that great to begin with because it doesn't control the costs of drugs," Grabel said. "Then if you take a step back, what (the act) is doing is again shifting the costs in the form of increased co-payments and deductibles back to the seniors. That got no press at all back then."
There are subsidies to pay the Medicare premium for the poorest Medicare beneficiaries, Grabel said, "but if you're at about $1,000 a month, that's going to be $78 of your income that's going to go to Medicare even before you get to the co-pays and deductible."
Presidential candidate John Kerry said, "George Bush socked seniors with a 17 percent increase in Medicare. What's right about that? That's the biggest increase in Medicare premiums in the history of the program. Raising Medicare costs -- that's W and that's wrong. Wrong choices, wrong direction. It's time for a president who will lead America in a new direction."
"We're going to set a new direction for America," said Kerry. "We're going to get health care costs under control. And America will stop being the only advanced nation in the world which fails to understand that health care is not a privilege for the wealthy, the connected, and the elected, it is a right for all Americans."
Edward F. Coyle, executive director, Alliance for Retired Americans, said "This record-breaking increase in Medicare premium payments is yet again further evidence of the Bush Administration's callous disregard for the well-being and retirement security concerns of older Americans. Seniors on fixed incomes are caught in an ever-tightening squeeze and are today paying record-high prices for gasoline, milk, prescription drugs and, now, doctor visits.
"It's clear George Bush continues to favor the interests of drug companies and HMOs over those of hard-working older Americans. He's made clear his choice and come Election Day seniors will make their voices heard, continued Coyle."
The U.S. Department of Health and Human Services said late Friday that Medicare premiums and deductibles will increase in 2005 in line with the actuarial forecast released in March in the Medicare Trustees Report.
The monthly premium paid by beneficiaries enrolled in Medicare Part B, which covers physician services, outpatient hospital services, certain home health services, durable medical equipment and other items, will increase $11.60 from $66.60 in 2004 to $78.20 in 2005.
The primary contributing factor to the increase in the Part B premium, which accounts for approximately 80 percent of the increase in benefit costs, is higher payments in Medicare's traditional plan. Additionally, payment rates for physicians will increase by 1.5 percent, preventing a 4.5 percent reduction that might have threatened access to high-quality services, according to an HHS press release.
"The new premiums reflect an enhanced Medicare that is providing seniors and people with disabilities with strengthened access to physician services and new preventive benefits, such as the new 'Welcome to Medicare' physical and screening exams, as well as improved Medicare Advantage plan choices that reduce beneficiaries' health care costs," said Dr. Mark McClellan, administrator of the Centers for Medicare & Medicaid Services.
The 17 percent increase in Medicare premiums is the largest increase in the 40-year history of the program, according to the Associated Press.
For Medicare Part A, which accounts for 7 percent of Medicare's 41.8 million beneficiaries, the 2005 deductible will increase $36 to $912, up from $876 in 2004. Medicare Part A pays for inpatient hospital, skilled nursing facility and some home health care costs.
HHS noted that Medicare premiums and deductibles are updated each year in accordance with formulas established by law. Current regulations provide that the federal government assume approximately 75 percent of the cost of Part B benefits; the Part B premiums paid by beneficiaries cover the difference.
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Campaign 2004