Medicare Premiums Increasing in 2006

In 2006, seniors and disabled citizens will be paying another $10.30 over the $78.20 that they are already pay this year. This represents a 13.2 percent increase for Medicare Part B premiums.


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In 2006, Medicare recipients will be paying this premium in addition to their Medicare Part D premium. The Part D premium will be $32 monthly. Recipients will also be paying the deductibles for Parts A, B, and D, depending on their enrollments.

Part B is a voluntary program offered to those on Medicare. The premiums for this program increased 13.5 percent in 2004 and 17.4 percent in 2005. These premiums are usually subtracted from Social Security checks. Next year’s cost of living increase has not been announced so the coming bite on senior citizens is not yet known. Part B premiums in 2005 were covered by 40 percent of the average cost-of-living increase.

This supplemental program is aimed at reducing prescription drug costs almost entirely and greatly decreasing any out-of-pocket costs for prescription drugs for millions of low-income Americans. Medicare recipients pay about 25 percent of program expenses via premiums and other fees, while taxpayers pay the remaining 75 percent.

“Next year, people on Medicare will be getting much more in benefits than they had previously received,” said Herb Kuhn speaking with the Associated Press. He is the director of the Center for Medicare Management, part of the Health and Human Services Department.

The increase in premiums is being driven by the number and greater frequency of doctor services such as lab tests, office visits, and drug administration. Doctor services increased at a rate of 6.3 percent last year and are expected to grow to 5.6 percent for 2005.

In press releases issued previously, the American Medical Association maintains that the increase in doctor services is due to the fact that doctors are handling symptoms previously requiring hospitalization but now treated in-office at a lower cost to government and their patients. Kuhn said, “We’re still trying to understand how much value we’re getting for that.”

“American are living longer than ever, more are entering Medicare, and chronic disease continues to increase, which naturally leads to an increased need for physician services,” said Dr. James Rohack, member the AMA Board of Trustees.

AMA Chairman Nancy Johnson said, “We’re committed to the highest quality care, bit to make further quality improvements Medicare payments must keep up with the cost of providing that care.”

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