[Federal Register Volume 76, Number 211 (Tuesday, November 1, 2011)]
[Notices]
[Pages 67570-67572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28188]


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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-8044-N]
RIN 0938-AQ15


Medicare Program; Part A Premiums for CY 2012 for the Uninsured 
Aged and for Certain Disabled Individuals Who Have Exhausted Other 
Entitlement

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

ACTION: Notice.

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

SUMMARY: This annual notice announces Medicare's Hospital Insurance 
(Part A) premium for uninsured enrollees in calendar year (CY) 2012. 
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, 2012, for these individuals will be $451. 
The reduced premium for certain other individuals as described in this 
notice will be $248.

DATES: Effective Date: This notice is effective on January 1, 2012.

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. These ``uninsured aged'' individuals 
are uninsured under the OASDI program or the Railroad Retirement Act, 
because they do not have 40 quarters of coverage under Title II of the 
Act (or are/were not married to someone who did). (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 for 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 who 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 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 2012 will be equal to the premium for 
uninsured aged enrollees reduced by 45 percent.

[[Page 67571]]

II. Monthly Premium Amount for CY 2012

    The monthly premium for the uninsured aged and certain disabled 
individuals who have exhausted other entitlement for the 12 months 
beginning January 1, 2012, is $451.
    The monthly premium for those individuals subject to the 45 percent 
reduction in the monthly premium is $248.

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 2012 
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 2012 on--(1) Current historical 
data; and (2) projection assumptions derived from current law and the 
Mid-Session Review of the President's Fiscal Year 2012 Budget.
    We estimate that in CY 2012, 40,787,939 people aged 65 years and 
over will be entitled to benefits (without premium payment) and that 
they will incur about $220.656 billion in benefits and related 
administrative costs. Thus, the estimated monthly average per capita 
amount is $450.82 and the monthly premium is $451. The full monthly 
premium reduced by 45 percent is $248.

IV. Costs to Beneficiaries

    The CY 2012 premium of $451 is approximately 0.22 percent higher 
than the CY 2011 premium of $450.
    We estimate that approximately 590,000 enrollees will voluntarily 
enroll in Medicare Part A by paying the full premium. We estimate an 
additional 45,000 enrollees will pay the reduced premium. We estimate 
that the aggregate cost to enrollees paying these premiums in CY 2012, 
compared to the amount that they paid in CY 2011, will be about $7 
million.

V. Waiver of Proposed Notice and Comment Period

    We use general notices, rather than notice and comment rulemaking 
procedures, to make announcements such as this premium notice. In doing 
so, we acknowledge that, under the Administrative Procedure Act (APA), 
interpretive rules, general statements of policy, and rules of agency 
organization, procedure, or practice are excepted from the requirements 
of notice and comment rulemaking. The agency may also waive notice and 
comment if there is ``good cause,'' as defined by the statute. We 
considered publishing a proposed notice to provide a period for public 
comment. However, under the APA, 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 are not using notice and comment rulemaking in this notification 
of Medicare Part A premiums for CY 2011 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 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. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 35).

VII. Regulatory Impact Statement

    We have examined the impact of this notice as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), 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 (March 22, 
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 Orders 12866 and 13563 direct 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 a cost to 
voluntary enrollees (section 1818 and section 1818A of the Act) of 
about $7 million. Therefore, this notice is a not a major action as 
defined in Title 5, United States Code, section 804(2) and is not an 
economically significant action under Executive Order 12866.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
$7.0 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 Social Security 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 for Medicare payment regulations 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 also 
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 2011, that 
threshold is approximately $136 million. This notice will have no

[[Page 67572]]

consequential effect on State, local, or tribal governments or on the 
private sector. However, States are required to 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 22, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: October 25, 2011.
Kathleen Sebelius,
Secretary.
[FR Doc. 2011-28188 Filed 10-27-11; 11:15 am]
BILLING CODE 4120-01-P