Q: What is the monthly Medicare premium for 2005?
A: For the 463,000 older and disabled Iowans who choose to receive health care coverage through Medicare Part B, the monthly premium for their medical insurance will rise to $78.20. Part B provides coverage for physician services, outpatient hospital care, certain home health services and durable medical equipment. Part B premiums cover 25 percent of program costs while the remaining 75 percent is paid for with general tax revenues. Medicare Part A provides hospital insurance coverage. Most Medicare beneficiaries do not pay a monthly premium for Medicare Part A because of the Medicare payroll tax they or their spouse paid during their years in the workforce.
Q: Are low-income seniors protected from the premium increase?
A: Yes. Even though the 17.5 percent increase has caused understandable dismay among many beneficiaries, the premium increase will not affect beneficiaries with limited assets and incomes below 135 percent of the federal poverty level. (That’s roughly $12,500 for individuals and $17,000 for couples.) These Medicare beneficiaries will have their Part B premiums paid for by the government. Sixteen percent of beneficiaries enrolled in Part B receive this assistance and more are eligible.
Q: What’s the reason for such a sizable Part B premium increase?
A: Health care costs continue to climb for employers, workers and families across America. The same goes for Medicare. As Medicare costs increase, so do Medicare Part B premiums. When the program was created in 1965, Medicare enrollees shouldered 50 percent of the costs through monthly premiums. Beginning in the early 1980s, the enrollee’s share of the premium dropped to 25 percent. In 1997 Congress worked out a bipartisan agreement that guaranteed beneficiaries would only need to cover 25 percent of program costs. In large measure Medicare’s cost increases are caused by increased demand for physician services and the addition of new Part B benefits including screenings for cholesterol and diabetes, as well as an initial physical for new Medicare beneficiaries.
Q: Why are health care providers getting more Medicare money?
A: Simply put, the answer is to ensure access to quality health care services for all Medicare beneficiaries – whether they live in rural or urban areas of the country. In the past few years, beneficiaries around the country have had problems finding a doctor who will take Medicare patients. Doctors have said that low Medicare payments contribute to this situation. Broad, bipartisan support by a majority of lawmakers in the U.S. Senate – 71 Republican and Democratic lawmakers – helped secure increased payments for health care providers in the new Medicare law. If beneficiaries can’t find a doctor who will see them, Medicare benefits would be meaningless. No one wants to see the Part B premium go up, but beneficiaries paying the premium also want to know they can access physician services when they enroll.