[Federal Register Volume 59, Number 230 (Thursday, December 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29556]
[[Page Unknown]]
[Federal Register: December 1, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[OACT-046-N]
RIN 0938-AG49
Medicare Program; Part A Premium for 1995 for the Uninsured Aged
and for Certain Disabled Individuals Who Have Exhausted Other
Entitlement
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the hospital insurance premium for
calendar year 1995 under Medicare's hospital insurance program (Part A)
for the uninsured aged and for certain disabled individuals who have
exhausted other entitlement. The monthly Medicare Part A premium for
the 12 months beginning January 1, 1995 for these individuals is $261.
The reduced premium for certain other individuals as described in this
notice is $183. Section 1818(d) of the Social Security Act specifies
the method to be used to determine these amounts.
EFFECTIVE DATE: This notice is effective on January 1, 1995.
FOR FURTHER INFORMATION CONTACT: John Wandishin, (410) 966-6389.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1818 of the Social Security Act (the Act) provides for
voluntary enrollment in the Medicare hospital insurance program
(Medicare Part A), subject to payment of a monthly premium, of certain
persons who are age 65 and older, uninsured for social security or
railroad retirement benefits and do not otherwise meet the requirements
for entitlement to Medicare Part A. (Persons insured under the Social
Security or Railroad Retirement Acts need not pay premiums for hospital
insurance.)
Section 1818(d) of the Act requires the Secretary to estimate, on
an average per capita basis, the amount to be paid from the Federal
Hospital Insurance Trust Fund for services performed and for related
administrative costs incurred in the following year with respect to
individuals age 65 and over who will be entitled to benefits under
Medicare Part A. The Secretary must then, during September of each
year, determine the monthly actuarial rate (the per capita amount
estimated above divided by 12) and publish the dollar amount to be
applicable for the monthly premium in the succeeding year. If the
premium is not a multiple of $1, the premium is rounded to the nearest
multiple of $1 (or, if it is a multiple of 50 cents but not of $1, it
is rounded to the next highest $1). The 1994 premium under this method
was $245 and was effective January 1994. (See 58 FR 58555; November 2,
1993.)
Section 1818(d)(2) of the Act requires the Secretary to determine
and publish, during September of each calendar year, the amount of the
monthly premium for the following calendar year for persons who
voluntarily enroll in Medicare Part A.
Section 1818A of the Act provides for voluntary enrollment in
Medicare Part A, subject to payment of a monthly premium, of certain
disabled individuals who have exhausted other entitlement. These
individuals are those not now entitled but who have been entitled under
section 226(b) of the Act, continue to have the disabling impairment
upon which their entitlement was based, and whose entitlement ended
solely because they had earnings that exceeded the substantial gainful
activity amount (as defined in section 223(d)(4) of the Act).
Section 1818A(d)(2) of the Act specifies that the premium
determined under section 1818(d)(2) of the Act for the aged will also
apply to certain disabled individuals as described above.
Section 13508 of the Omnibus Budget Reconciliation Act of 1993
(Pub. L. 103-66, enacted on August 10, 1993) amended section 1818(d) of
the Act to provide for a reduction in the monthly premium amount for
certain voluntary enrollees. The reduction applies for individuals who
are not eligible for social security or railroad retirement benefits
but who:
Had at least 30 quarters of coverage under title II of the
Act;
Were married and had been married for the previous 1-year
period to an individual who had at least 30 quarters of coverage;
Had been married to an individual for at least 1 year at
the time of the individual's death and the individual had at least 30
quarters of coverage; or
Are divorced from an individual who at the time of divorce
had at least 30 quarters of coverage and the marriage lasted at least
10 years.
For calendar year 1995, section 1818(d)(4)(A), as added by section
13508 of Public Law 103-66 specifies that the monthly premium that
these individuals will pay for calendar year 1995 will be equal to the
monthly premium for aged voluntary enrollees reduced by 30 percent.
II. Premium Amount for 1995
Under the authority of sections 1818(d)(2) and 1818A(d)(2) of the
Act, the Secretary has determined that the monthly Medicare Part A
hospital insurance premium for the uninsured aged and for certain
disabled individuals who have exhausted other entitlement for the 12
months beginning January 1, 1995 is $261.
The monthly premium for those individuals entitled to a 30 percent
reduction in the monthly premium for the 12-month period beginning
January 1, 1995 is $183.
III. Statement of Actuarial Assumptions and Bases Employed in
Determining the Monthly Premium Rate
As discussed in section I of this notice, the monthly Medicare Part
A premium for 1995 is equal to the estimated monthly actuarial rate for
1995 rounded to the nearest multiple of $1. The monthly actuarial rate
is defined to be one-twelfth of the average per capita amount that the
Secretary estimates will be paid from the Federal Hospital Insurance
Trust Fund for services performed and related administrative costs
incurred in 1995 for individuals age 65 and over who will be entitled
to benefits under the hospital insurance program. Thus, the number of
individuals age 65 and over who will be entitled to hospital insurance
benefits and the costs incurred on behalf of these beneficiaries must
be projected to determine the premium rate.
The principal steps involved in projecting the future costs of the
hospital insurance program are (a) establishing the present cost of
services furnished to beneficiaries, by type of service, to serve as a
projection base; (b) projecting increases in payment amounts for each
of the various service types; and (c) projecting increases in
administrative costs. Establishing historical Medicare Part A
enrollment and projecting future enrollment, by type of beneficiary, is
part of this process.
We have completed all of the above steps, basing our projections
for 1995 on (a) current historical data and (b) projection assumptions
under current law from the Midsession Review of the President's Fiscal
Year 1995 Budget, incorporating the provisions of Public Law 103-66. It
is estimated that in calendar year 1995, 32.548 million people age 65
and over will be entitled to Medicare Part A benefits (without premium
payment), and that these individuals will, in 1995, incur $102.113
billion of benefits for services performed and related administrative
costs. Thus, the estimated monthly average per capita amount is $261.44
and the monthly premium is $261. The monthly premium for those
individuals eligible to pay this premium reduced by 30 percent is $183.
IV. Costs to Beneficiaries
The 1995 Medicare Part A premium is about 7 percent higher than the
$245 monthly premium amount for the 12-month period beginning January
1, 1994.
We estimate that there will be, in calendar year 1995,
approximately 277,000 enrollees who will voluntarily enroll in Medicare
Part A by paying the full premium and who do not otherwise meet the
requirements for entitlement. An additional 5,000 enrollees will be
paying the reduced premium. The estimated overall effect of the changes
in the premium will be a cost to these voluntary enrollees of about $50
million.
V. Impact Statement
This notice merely announces amounts required by legislation. This
notice is not a proposed rule or a final rule issued after a proposal,
and it does not alter any regulation or policy. Therefore, we have
determined, and the Secretary certifies, that no analyses are required
under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C
601 through 612) or section 1102(b) of the Act.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Authority: Sections 1818(d)(2) and 1818A(d)(2) of the Social
Security Act (42 U.S.C. 1395i-2(d)(2) and 1395i-2a(d)(2)).
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 27, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: October 20, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-29556 Filed 11-30-94; 8:45 am]
BILLING CODE 4120-01-P