2007 Medicare Premiums
In 2007 Medicare Premiums will rise by the smallest amount since 2001
There is good news and bad news about Medicare premiums for 2007. As premiums rise, physician reimbursement declines and it's all related.
The good news is that Medicare hikes in premiums for 2007 will be the lowest since 2001. The bad news is that the reason for the low hikes is based on a mathematical formula which takes into consideration the 5% reduction in physician reimbursement also planned for 2007.
Physicians May Refuse to Treat Medicare Patients
The reduction in reimbursement to physicians may have long lasting effects on healthcare for seniors as the American Medical Association's survey of physicians indicates that over 45% of MDs intend to refuse new Medicare patients and some will discontinue services to Medicare patients over the next few years. Planned reduction in Medicare reimbursement is expected to increase each year and to reach 37% over the next nine years. As it is, there are not enough physicians are entering the field of geriatrics let alone see the number of physicians accepting Medicare patients decline.
As the Baby Boom generation heads into the Medicare ranks, this can present serious health care issues. The first of the Baby Boom generation turned 60 in 2006. Medicare eligibility begins at 65 for the majority of seniors.
How Much Wil I Pay?
The increase for Part B Medicare which covers physician care and outpatient services, will be 5.6% or roughly $5 per month to $93.50 for 96% of the Medicare beneficiaries.
Sliding Scale Begins for Affluent Seniors
The remaining, more affluent 4% of Medicare beneficiaries, will be subject to the new law (Medicare Modernization Act of 2003) which becomes effective in 2007 and requires those seniors earning over $80,000 per year ($160,000 for married couples) will bay slightly higher premiums based on their income levels. Their premiums will range from $106 to $162.10 per month. Their premiums will continue rise approximately 10% over the next 3 years.
If Congress Blocks Reimbursement Reductions...
In the event that Congress decides not to reduce physician reimbursement by 5% in 2007, Medicare beneficiaries would see no increase in premiums for 2007. Contingency funds would make up the difference at this point. At some point down the line the contingency funds would have to be replenished, but there is no plan at the present to do this.
