New Medicare Premium and Deductible Rates for 2004

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New Medicare Premium and Deductible Rates for 2004

PRNewswire via yahoonews
October 28, 2003

The United States Department of Health and Human Services (DHHS) announced the new Medicare premium, deductible and coinsurance amounts to be paid by Medicare beneficiaries in 2004.

For Medicare Part A, which pays for inpatient hospital, skilled nursing facility and some home health care, the deductible paid by the beneficiary will be $876 in 2003, up 4.3 percent from this year's $840 deductible. 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 be $66.60, an increase of 13.5 percent over the $58.70 premium for 2003.

Medicare law requires that the deductibles and premiums be updated annually in accordance with statutory formulas. The Part B premium is required to be the amount needed to cover 25 percent of estimated program cost for enrollees aged 65 and older. General revenue tax dollars cover the other 75 percent of the costs. The same statute prescribes the method for computing the Part A inpatient hospital deductible.

All Medicare beneficiaries enrolled in Part B pay the monthly premium. The Part A deductible applies only to those enrolled in the original fee-for- service Medicare Program. Those who enroll in private Medicare + Choice plans may not be affected by the Part A increase, and may receive additional benefits with different cost-sharing arrangements.

Most of Medicare's 41.7 million beneficiaries are enrolled in the optional Part B, which helps pay for physician services, hospital outpatient care, durable medical equipment and other services, including some home health care. Nearly 90 percent also have some form of supplemental coverage (such as Medigap, Medicaid or Medicare + Choice) to help reduce out-of-pocket medical costs.

The Part A deductible is the beneficiary's only cost for up to 60 days of Medicare-covered inpatient hospital care. However, for extended Medicare- covered hospital stays, beneficiaries must pay an additional $219 per day for days 61 through 90 in 2004, and $438 per day for hospital stays beyond the 90th day in a benefit period. For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 will be $109.50 in 2004.

Most Medicare beneficiaries do not pay a premium for Part A services since they have 40 quarters of Medicare-covered employment. Seniors and persons under age 65 with disabilities may obtain Part A coverage even though they have fewer than 30 quarters of Medicare-covered employment, by paying a monthly premium set according to a formula in the Medicare statute at $343 for 2004, an increase of $27 from 2003. Seniors and certain persons under age 65 with disabilities with 30 to 39 quarters of Medicare-covered employment are entitled to pay a reduced monthly premium of $189.

States have programs that pay some or all of beneficiaries' premiums, and coinsurance for certain people who have Medicare and a low income. Information is available at 1-800-MEDICARE (1-800-633-4227) and, for hearing and speech impaired, at TTY/TDD: 1-877-486-2048.

First Coast Service Options, Inc. (FCSO) contracts with the Centers for Medicare & Medicaid Services (CMS) and the Blue Cross and Blue Shield Association (BCBSA) to administer the Medicare Program in Florida and Connecticut. FCSO's parent company, Blue Cross and Blue Shield of Florida, Inc. (BCBSF), is an independent licensee of the BCBSA.