WASHINGTON, Sep 04, 2004 (United Press International via COMTEX) -- U.S. officials are raising Medicare's monthly premium by $11.60 to $78.20, the New York Times reported Saturday.
The 17 percent hike results largely from increased payments to physicians and reflects rising medical expenses generally, officials said. They said the rate hike has nothing to do with a program that will start in 2006 to offer prescription drugs, for which beneficiaries must pay a separate premium.
About $1.75 of this year's $11.60 premium increase results from the billions of dollars Medicare is paying insurers to encourage them to offer private plans. Many in Congress refused last year to support the new Medicare drug benefit legislation unless the program did more to lure patients into such private plans.
Medical costs have been rising faster than inflation for more than a decade, reflecting innovations and better care for patients. Medicare is not immune to such increases, although program administrators have long tried to slow such increases with measures that often amount to price controls.
Copyright 2004 by United Press International.