[Federal Register Volume 82, Number 223 (Tuesday, November 21, 2017)]
[Notices]
[Pages 55365-55367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24912]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-8066-N]
RIN 0938-AT06


Medicare Program; CY 2018 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) 2018. 
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, 2018 for these individuals will be $422. 
The premium for certain other individuals as described in this notice 
will be $232.

DATES: Effective Date: This notice is effective on January 1, 2018.

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 2018 will be equal to the premium for 
uninsured aged enrollees reduced by 45 percent.

II. Monthly Premium Amount for CY 2018

    The monthly premium for the uninsured aged and certain disabled 
individuals who have exhausted other entitlement for the 12 months 
beginning January 1, 2018, is $422.
    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 $232.

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 2018 
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 2018 on--(1) current historical 
data; and (2) projection assumptions derived from current law and the 
Mid-Session Review of the President's Fiscal Year 2018 Budget.
    We estimate that in CY 2018, 50,295,843 people aged 65 years and 
over will be entitled to (enrolled in) benefits (without premium 
payment) and that they will incur about $254.518 billion in benefits 
and related administrative costs. Thus, the estimated monthly average 
per capita

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amount is $421.70 and the monthly premium is $422. Subsequently, the 
full monthly premium reduced by 45 percent is $232.

IV. Costs to Beneficiaries

    The CY 2018 premium of $422 is approximately 2 percent higher than 
the CY 2017 premium of $413. We estimate that approximately 668,000 
enrollees will voluntarily enroll in Medicare Part A, by paying the 
full premium. We estimate that over 90 percent of these individuals 
will have their Part A premium paid for by states, since they 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 2018 reduced 
premium of $232 is approximately 2 percent higher than the CY 2017 
premium of $227. We estimate an additional 71,000 enrollees will pay 
the reduced premium. Therefore, we estimate that the total aggregate 
cost to enrollees paying these premiums in CY 2018, compared to the 
amount that they paid in CY 2017, will be about $76 million.

V. Waiver of Proposed Notice and Comment Period

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment prior to a rule taking 
effect in accordance with section 553(b) of the Administrative 
Procedure Act (APA) and section 1871 of the Act. However, we believe 
that the policies being publicized in this document do not constitute 
agency rulemaking. Rather, the statute requires that the agency 
determine the applicable premium amount for each calendar year in 
accordance with the statutory formula, and we are simply notifying the 
public of the changes to the Medicare Part A premiums for CY 2018. To 
the extent any of the policies articulated in this document constitute 
interpretations of the statute's requirements or procedures that will 
be used to implement the statute's directive, they are interpretive 
rules, general statements of policy, and rules of agency organization, 
procedure, or practice, which are not subject to notice and comment 
rulemaking under the APA.
    To the extent that notice and comment rulemaking would otherwise 
apply, we find good cause to waive this requirement. Under the APA, we 
may waive notice and public procedure if we find good cause that prior 
notice and comment are impracticable, unnecessary, or contrary to the 
public interest. We believe that notice and comment rulemaking for this 
notification of Medicare Part A premiums for CY 2018 is unnecessary 
because of the lack of CMS discretion in the statutory formula that is 
used to calculate the premium and the solely ministerial function that 
this notice serves. Therefore, we find good cause to waive notice and 
comment procedures, if such procedures are required at all.

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 Statement

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 impacts 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), the Congressional Review Act (5 U.S.C. 804(2)) and 
Executive Order 13771 on Reducing Regulation and Controlling Regulatory 
Costs (January 30, 2017).
    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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order. 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 $76 million. As a result, 
this notice is non-economically significant under section 3(f)(1) of 
Executive Order 12866. 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 the 
Medicare Part A premiums for CY 2018. 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 (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

[[Page 55367]]

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. 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 2017, that 
threshold is approximately $148 million. This notice does not impose 
mandates that will have a consequential effect of $148 million or more 
on state, local, or tribal governments or on the private sector.
    Executive Order 13771, titled ``Reducing Regulation and Controlling 
Regulatory Costs,'' was issued on January 30, 2017 (82 FR 9339, 
February 3, 2017). It has been determined that this notice is a 
transfer notice that does not impose more than de minimis costs and 
thus is not a regulatory action for the purposes of E.O. 13771.
    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 direct effect on 
state or local governments, preempt state law, or otherwise have 
Federalism implications.
    Although this notice merely announces Medicare's Part A premiums 
for CY 2018 and does not constitute a substantive rule, we nevertheless 
prepared this Impact Statement in the interest of ensuring that the 
impacts of this notice are fully understood.

    Dated: October 27, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: November 1, 2017.
Eric D. Hargan,
Acting Secretary, Department of Health and Human Services.
[FR Doc. 2017-24912 Filed 11-17-17; 4:15 pm]
 BILLING CODE 4120-01-P