[Federal Register Volume 62, Number 212 (Monday, November 3, 1997)]
[Notices]
[Pages 59366-59368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29030]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[OACT-056-N]
RIN 0938-AI10


Medicare Program; Part A Premium for 1998 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 1998 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

[[Page 59367]]

the 12 months beginning January 1, 1998 for these individuals is $309. 
The reduced premium for certain other individuals as described in this 
notice is $170. 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, 1998.

FOR FURTHER INFORMATION CONTACT: John Wandishin, (410) 786-6389.

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 us 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. We 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 1997 premium under this method was $311 and 
was effective January 1, 1997. (See 61 FR 56691, November 4, 1996.)
    Section 1818(d)(2) of the Act requires us 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, who 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 
(Public Law 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 1998, section 1818(d)(4)(A) of the Act specifies 
that the monthly premium that these individuals will pay for calendar 
year 1998 will be equal to the monthly premium for aged voluntary 
enrollees reduced by 45 percent.

II. Premium Amount for 1998

    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, 1998, is $309.
    The monthly premium for those individuals entitled to a 45-percent 
reduction in the monthly premium for the 12-month period beginning 
January 1, 1998 is $170.

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 1998 is equal to the estimated monthly actuarial rate for 
1998 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 1998 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 1998 on (a) current historical data and (b) projection assumptions 
under current law from the Midsession Review of the President's Fiscal 
Year 1998 Budget, incorporating the provisions of Public Law 103-66. It 
is estimated that in calendar year 1998, 33.032 million people age 65 
and over will be entitled to Medicare Part A benefits (without premium 
payment), and that these individuals will, in 1998, incur $122.357 
billion of benefits for services performed and related administrative 
costs. Thus, the estimated monthly average per capita amount is $308.68 
and the monthly premium is $309. The monthly premium for those 
individuals eligible to pay this premium reduced by 45 percent is $170.

IV. Costs to Beneficiaries

    The 1998 Medicare Part A premium is less than 1 percent lower than 
the $311 monthly premium amount for the 12-month period beginning 
January 1, 1997.
    We estimate that there will be, in calendar year 1998, 
approximately 344,000 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 9,000 enrollees will be 
paying the reduced premium. The estimated overall effect of the changes 
in the premium will be a savings to these voluntary enrollees of about 
$10 million.

[[Page 59368]]

V. Waiver of Notice of Proposed Rulemaking

    The Medicare statute, as discussed previously, requires publication 
of the Medicare Part A hospital insurance premium for the upcoming 
calendar year during September of each year. The amounts are determined 
according to the statute. As has been our custom, we use general 
notices, rather than formal notice and comment rulemaking procedures, 
to make such announcements. In doing so, we acknowledge that, under the 
Administrative Procedure Act, interpretive rules, general statements of 
policy, and rules of agency organization, procedure, or practice are 
excepted from the requirements of notice and comment rulemaking.
    We considered publishing a proposed notice to provide a period for 
public comment. However, we may waive that procedure if we find good 
cause that prior notice and comment are impracticable, unnecessary, or 
contrary to the public interest. We find that the procedure for notice 
and comment is unnecessary because the formula used to calculate the 
Part A hospital insurance premium is statutorily directed, and we can 
exercise no discretion in following that formula. Moreover, the statute 
established the time period for which the premium will apply and 
delaying publication of the premium amount would be contrary to the 
public interest. Therefore, we find good cause to waive publication of 
a proposed notice and solicitation of public comments.

VI. 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 certify 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 19, 1997.
Nancy-Ann Min DeParle,
Deputy Administrator, Health Care Financing Administration.

    Dated: October 7, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-29030 Filed 10-31-97; 8:45 am]
BILLING CODE 4120-01-P