[Federal Register Volume 78, Number 210 (Wednesday, October 30, 2013)]
[Notices]
[Pages 64951-64953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-25591]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8054-N]
RIN 0938-AR57
Medicare Program; Part A Premiums for CY 2014 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) 2014.
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, 2014, for these individuals will be $426.
The premium for certain other individuals as described in this notice
will be $234.
DATES: Effective Date: This notice is effective on January 1, 2014.
[[Page 64952]]
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 upcoming 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 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 2014 will be equal to the premium for
uninsured aged enrollees reduced by 45 percent.
II. Monthly Premium Amount for CY 2014
The monthly premium for the uninsured aged and certain disabled
individuals who have exhausted other entitlement for the 12 months
beginning January 1, 2014, is $426.
The monthly premium for the individuals eligible under Section
1818(d)(4)(B) of the Act, and therefore subject to the 45 percent
reduction in the monthly premium, is $234.
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 2014
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 2014 on: (1) Current historical
data, and (2) projection assumptions derived from current law and the
Mid-Session Review of the President's Fiscal Year 2014 Budget.
We estimate that in CY 2014, 43,923,567 people aged 65 years and
over will be entitled to benefits (without premium payment) and that
they will incur about $224.753 billion in benefits and related
administrative costs. Thus, the estimated monthly average per capita
amount is $426.41 and the monthly premium is $426. Subsequently, the
full monthly premium reduced by 45 percent is $234.
IV. Costs to Beneficiaries
The CY 2014 premium of $426 is approximately 3.40 percent lower
than the CY 2013 premium of $441. We estimate that approximately
626,000 enrollees will voluntarily enroll in Medicare Part A by paying
the full premium. Furthermore, the CY 2014 reduced premium of $234 is
approximately 3.70 percent lower than the CY 2013 premium of $243. We
estimate an additional 55,000 enrollees will pay the reduced premium.
Therefore, we estimate that the total aggregate savings to enrollees
paying these premiums in CY 2014, compared to the amount that they paid
in CY 2013, will be about $119 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 2014 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
[[Page 64953]]
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 Analysis
A. Statement of Need
Section 1818(d) of the Act requires the Secretary of the Department
of Health and Human Services (the Secretary) during September of each
year to determine and publish the amount to be paid, on an average per
capita basis, from the Federal Hospital Insurance Trust Fund for
services incurred in the impending 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.
B. Overall Impact
We have examined the impacts of this rule 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., Part I, Ch. 8).
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 notices
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 the changes in the Part A premium will be a savings
to voluntary enrollees (section 1818 and section 1818A of the Act) of
about $119 million. As a result, this notice is economically
significant under section 3(f)(1) of Executive Order 12866 and thus, a
major action under the Congressional Review Act. In accordance with the
provisions of Executive Order 12866, this notice was reviewed by the
Office of Management and Budget.
The RFA requires agencies to analyze options for regulatory relief
of small entities, 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 small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of less than $7.0 million to $35.5 million in any 1 year (for
details, see the Small Business Administration's Web site at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf).
Individuals and states are not included in the definition of a
small entity. As discussed above, this annual notice announces
Medicare's Hospital Insurance (Part A) premium for uninsured enrollees
in calendar year (CY) 2014. As a result, we are not preparing an
analysis for the RFA because the Secretary has determined that this
notice will not have a significant economic impact on a substantial
number of small entities.
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. As discussed above, we are not preparing an
analysis for section 1102(b) of the Act, because the Secretary has
determined that this notice will not have a significant impact on the
operations of a substantial number of small rural hospitals.
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 2013, that
threshold is approximately $141 million. This notice does not impose
mandates that will have a consequential effect of $141 million or more
on state, local, or tribal governments or on the private sector.
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. Since this notice does not impose any costs on state or
local governments, the requirements of Executive Order 13132 are not
applicable.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 20, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Dated: October 18, 2013.
Kathleen Sebelius,
Secretary.
[FR Doc. 2013-25591 Filed 10-28-13; 11:15 am]
BILLING CODE 4120-01-P