[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]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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