Medicare premiums will increase 13 percent

WASHINGTON – Medicare monthly premiums for doctor visits and outpatient care will jump next year from $78.20 to $88.50, federal officials announced Friday.

The 13.2 percent increase is lower than last year’s record-high 17.4 percent spike, but nevertheless drains more cash from the Social Security checks of Americans 65 and older, from which Medicare premiums typically are drawn.

The premium increase will offset higher program spending that’s due to more intensive patient care, said Herb Kuhn, the director of the Center for Medicare Management at the Centers for Medicare & Medicaid Services. Included in that spending is more frequent use of hospital outpatient services, doctor visits, lab tests, imaging and other minor medical procedures.

“They’re all up. They’re all up substantially, and we’re trying to understand how much value we’re getting for that, and we just don’t have a good handle on that,” Kuhn said.

The higher premiums also will help shore up Medicare’s Supplementary Medical Insurance trust fund, which pays a portion of physician and outpatient care. Legislation that Congress passed in recent years to increase what Medicare pays for physician services has left trust fund assets “below where we would normally like it to be,” said Richard Foster, Medicare’s chief actuary.

If Congress increases the physician payment level this year, Medicare’s 2007 premiums for doctors’ services probably will increase as well, Foster said.

Kuhn said doctors should be adequately compensated for treating Medicare’s 43 million elderly and disabled patients. But he added that “the current system right now is just not sustainable. Simply adding larger payment updates to the current system would not only be expensive but from a standpoint of promoting more efficient and better-quality care, this is not going to get us there.”