[Federal Register Volume 74, Number 203 (Thursday, October 22, 2009)]
[Notices]
[Pages 54581-54583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-25371]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-8038-N]
RIN 0938-AP43


Medicare Program; Part A Premium for Calendar Year 2010 for the 
Uninsured Aged and for Certain Disabled Individuals Who Have Exhausted 
Other Entitlement

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This annual notice announces Medicare's Hospital Insurance 
(Part A) premium for uninsured enrollees in calendar year (CY) 2010. 
This premium is paid by enrollees age 65 and over who are not otherwise 
eligible for benefits under Medicare Part A (hereafter known as the 
``uninsured aged'') and by certain disabled individuals who have 
exhausted other entitlement. The monthly Part A premium for the 12 
months beginning January 1, 2010 for these individuals will be $461. 
The reduced premium for certain other individuals as described in this 
notice will be $254.

DATES: Effective Date: This notice is effective on January 1, 2010.

FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390.

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 aged 65 and older who are uninsured under the Old-Age, 
Survivors, and Disability Insurance (OASDI) program or the Railroad 
Retirement Act and do not otherwise meet the requirements for 
entitlement to Medicare Part A. (Persons insured under the OASDI 
program or the Railroad Retirement Act and certain others do not have 
to pay premiums for 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 are 
individuals who were entitled to coverage due to a disabling impairment 
under section 226(b) of the Act, but are no longer entitled to 
disability benefits and free Medicare Part A coverage because they have 
gone back to work and their earnings exceed the statutorily defined 
``substantial gainful activity'' amount (section 223(d)(4) of the Act).
    Section 1818A(d)(2) of the Act specifies that the provisions 
relating to premiums under section 1818(d) through section 1818(f) of 
the Act for the aged will also apply to certain disabled individuals as 
described above.
    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 incurred in the following calendar 
year (CY) (including the associated administrative costs) on behalf of 
individuals aged 65 and over who will be entitled to benefits under 
Medicare Part A. We must then determine, during September of each year, 
the monthly actuarial rate for the following year (the per capita 
amount estimated above divided by 12) and publish the dollar amount for 
the monthly premium in the succeeding CY. 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

[[Page 54582]]

50 cents but not of $1, it is rounded to the next highest $1).
    Section 13508 of the Omnibus Budget Reconciliation Act of 1993 
(Pub. L. 103-66) amended section 1818(d) of the Act to provide for a 
reduction in the premium amount for certain voluntary enrollees 
(section 1818 and section 1818A of the Act). The reduction applies to 
an individual who is eligible to buy into the Medicare Part A program 
and who, as of the last day of the previous month--
     Had at least 30 quarters of coverage under Title II of the 
Act;
     Was married, and had been married for the previous 1-year 
period, to a person who had at least 30 quarters of coverage;
     Had been married to a person for at least 1 year at the 
time of the person's death if, at the time of death, the person had at 
least 30 quarters of coverage; or
     Is divorced from a person and had been married to the 
person for at least 10 years at the time of the divorce if, at the time 
of the divorce, the person had at least 30 quarters of coverage.
    Section 1818(d)(4)(A) of the Act specifies that the premium that 
these individuals will pay for CY 2010 will be equal to the premium for 
uninsured aged enrollees reduced by 45 percent.

II. Monthly Premium Amount for CY 2010

    The monthly premium for the uninsured aged and certain disabled 
individuals who have exhausted other entitlement for the 12 months 
beginning January 1, 2010, is $461.
    The monthly premium for those individuals subject to the 45 percent 
reduction in the monthly premium is $254.

III. Monthly Premium Rate Calculation

    As discussed in section I of this notice, the monthly Medicare Part 
A premium is equal to the estimated monthly actuarial rate for CY 2010 
rounded to the nearest multiple of $1 and equals one-twelfth of the 
average per capita amount, which is determined by projecting the number 
of Part A enrollees aged 65 years and over as well as the benefits and 
administrative costs that will be incurred on their behalf.
    The steps involved in projecting these future costs to the Federal 
Hospital Insurance Trust Fund are:
     Establishing the present cost of services furnished to 
beneficiaries, by type of service, to serve as a projection base;
     Projecting increases in payment amounts for each of the 
service types; and
     Projecting increases in administrative costs.
    We base our projections for CY 2010 on--(1) current historical 
data; and (2) projection assumptions derived from current law and the 
Mid-Session Review of the President's Fiscal Year 2010 Budget.
    We estimate that in CY 2010, 38,086,139 people aged 65 years and 
over will be entitled to benefits (without premium payment) and that 
they will incur about $210.795 billion in benefits and related 
administrative costs. Thus, the estimated monthly average per capita 
amount is $461.22 and the monthly premium is $461. The full monthly 
premium reduced by 45 percent is $254.

IV. Costs to Beneficiaries

    The CY 2010 premium of $461 is approximately 4 percent higher than 
the CY 2009 premium of $443.
    We estimate that approximately 558,000 enrollees will voluntarily 
enroll in Medicare Part A by paying the full premium. We estimate an 
additional 40,000 enrollees will pay the reduced premium. We estimate 
that the aggregate cost to enrollees paying these premiums will be 
about $125 million in CY 2010 more than the amount that they paid in CY 
2009.

V. Waiver of Proposed Notice and Comment Period

    We are not using notice and comment rulemaking in this notification 
of Medicare Part A premiums for CY 2010, as that procedure is 
unnecessary because of the lack of discretion in the statutory formula 
that is used to calculate the premium and the solely ministerial 
function that this notice serves. The Administrative Procedure Act 
(APA) permits agencies to waive notice and comment rulemaking when 
notice and public comment thereon are unnecessary. On this basis, we 
waive publication of a proposed notice and a solicitation of public 
comments.

VI. Regulatory Impact Statement

    We have examined the impacts of this final rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. 
L. 96-354), section 1102(b) of the Social Security Act, section 202 of 
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive 
Order 13132 on Federalism (August 4, 1999), and the Congressional 
Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). As stated in 
section IV of this notice, we estimate that the overall effect of these 
changes in the Part A premium will be an increased cost to voluntary 
enrollees (section 1818 and section 1818A of the Act) of about $125 
million. Therefore, this notice is a major rule as defined in Title 5, 
United States Code, section 804(2) and is an economically significant 
rule under Executive Order 12866.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses, if a rule has a significant impact on a 
substantial number of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and 
government agencies. Most hospitals and most other providers and 
suppliers are small entities, either by nonprofit status or by having 
revenues of $7 million to $34.5 million in any 1 year. Individuals and 
States are not included in the definition of a small entity. We have 
determined that this notice will not have a significant economic impact 
on a substantial number of small entities. Therefore, we are not 
preparing an analysis under the RFA.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds. The Secretary has 
determined that this notice will not have a significant impact on the 
operations of a substantial number of small rural hospitals. Therefore, 
we are not preparing an analysis under section 1102(b) of the Act.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2009, that 
threshold is approximately $133 million. This notice has no 
consequential effect on State, local, or tribal governments or on the 
private sector. However, States are required to

[[Page 54583]]

pay the premiums for dually-eligible beneficiaries.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This notice will not have a substantial effect on State 
or local governments.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance)

    Dated: September 1, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.

    Dated: September 17, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-25371 Filed 10-16-09; 4:15 pm]
BILLING CODE 4120-01-P