[Federal Register Volume 81, Number 220 (Tuesday, November 15, 2016)]
[Notices]
[Pages 80071-80073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27388]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-8063-N]
RIN 0938-AS71


Medicare Program; CY 2017 Part A Premiums 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) 2017. 
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, 2017, for these individuals will be $413. 
The premium for certain other individuals as described in this notice 
will be $227.

DATES: Effective Date: This notice is effective on January 1, 2017.

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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)(1) 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 2017 will be equal to the premium for 
uninsured aged enrollees reduced by 45 percent.

II. Monthly Premium Amount for CY 2017

    The monthly premium for the uninsured aged and certain disabled 
individuals who have exhausted other entitlement for the 12 months 
beginning January 1, 2017, is $413.
    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 $227.

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 2017 
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 Medicare 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 2017 on--(1) current historical 
data; and (2) projection assumptions derived from current law and the 
Mid-Session Review of the President's Fiscal Year 2017 Budget.
    We estimate that in CY 2017, 48,634,512 people aged 65 years and 
over will be entitled to (enrolled in) benefits (without premium 
payment) and that they will incur about $240.891 billion in benefits 
and related administrative costs. Thus, the estimated monthly average 
per capita amount is $412.76 and the monthly premium is $413. 
Subsequently, the full monthly premium reduced by 45 percent is $227.

IV. Costs to Beneficiaries

    The CY 2017 premium of $413 is approximately 0.5 percent higher 
than the CY 2016 premium of $411. We estimate that approximately 
654,000 enrollees will voluntarily enroll in Medicare Part A, by paying 
the full premium. Note that states pay Part A premiums for persons who 
are enrolled in the Qualified Medicare Beneficiary Program (a Medicaid 
program which helps certain low-income individuals with Medicare 
premium and cost-sharing liability). Furthermore, the CY 2017 reduced 
premium of $227 is approximately 0.5 percent higher than the CY 2016 
premium of $226. We estimate an additional 67,000 enrollees will pay 
the reduced premium. Therefore, we estimate that the total aggregate 
cost to enrollees paying these premiums in CY 2017, compared to the 
amount that they paid in CY 2016, will be about $17 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.

[[Page 80073]]

    We are not using notice and comment rulemaking in this notification 
of Medicare Part A premiums for CY 2017 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 requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

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 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 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. 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 cost to 
voluntary enrollees (section 1818 and section 1818A of the Act) of 
about $17 million. As a result, this notice is non-economically 
significant under section 3(f)(1) of Executive Order 12866 and is not 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 $7.5 million to $38.5 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 CY 2017. 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 2016, that 
threshold is approximately $146 million. This notice does not impose 
mandates that will have a consequential effect of $146 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.

    Dated: September 23, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: November 8, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-27388 Filed 11-10-16; 4:15 pm]
BILLING CODE 4120-01-P