[Federal Register Volume 83, Number 201 (Wednesday, October 17, 2018)]
[Notices]
[Pages 52455-52458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22529]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8069-N]
RIN 0938-AT34
Medicare Program; CY 2019 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.
-----------------------------------------------------------------------
SUMMARY: This annual notice announces Medicare's Hospital Insurance
(Part A) premium for uninsured enrollees in
[[Page 52456]]
calendar year (CY) 2019. 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, 2019 for these
individuals will be $437. The premium for certain other individuals as
described in this notice will be $240.
DATES: Effective Date: This notice is effective on January 1, 2019.
FOR FURTHER INFORMATION CONTACT: Yaminee Thaker, (410) 786-7921.
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 2019 will be equal to the premium for
uninsured aged enrollees reduced by 45 percent.
Section 1818(g) of the Act requires the Secretary, at the request
of a state, to enter into a Part A buy-in agreement with a state to pay
Medicare Part A premiums for Qualified Medicare Beneficiaries (QMBs).
Under the QMB program, state Medicaid agencies must pay the Medicare
Part A premium for those not eligible for premium-free Part A.
(Entering into a Part A buy-in agreement would permit a state to avoid
late enrollment penalties and enroll persons in Part A at any time of
the year (without regard to Medicare enrollment periods)).
II. Monthly Premium Amount for CY 2019
The monthly premium for the uninsured aged and certain disabled
individuals who have exhausted other entitlement for the 12 months
beginning January 1, 2019, is $437. 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 $240.
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 2019
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 2019 on--(1) current historical
data; and (2) projection assumptions derived from current law and the
Mid-Session Review of the President's Fiscal Year 2019 Budget.
We estimate that in CY 2019, 51,601,049 people aged 65 years and
over will be entitled to (enrolled in) benefits (without premium
payment) and that they will incur about $270.703 billion in benefits
and related administrative costs. Thus, the estimated monthly average
per capita amount is $437.17 and the monthly premium is $437.
Subsequently, the full monthly premium reduced by 45 percent is $240.
IV. Costs to Beneficiaries
The CY 2019 premium of $437 is approximately 3.6 percent higher
than the CY 2018 premium of $422. We estimate that approximately
679,000 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 QMB program. Furthermore, the CY 2019 reduced premium
of $240 is approximately 3.4 percent higher than the CY 2018 premium of
$232. We estimate an additional 75,000 enrollees will pay the reduced
premium. Therefore, we estimate that the total aggregate cost to
enrollees paying these premiums in CY 2019, compared to the
[[Page 52457]]
amount that they paid in CY 2018, will be about $129 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 2019. 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 2019 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 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 impacts of this notice in accordance with
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.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). Although we do not consider this notice to constitute a
substantive rule, this notice is economically significant under section
3(f)(1) of Executive Order 12866. 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 $129 million.
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
less than $7.5 million to $38.5 million in any 1 year. Individuals and
states are not included in the definition of a small entity. This
annual notice announces the Medicare Part A premiums for CY 2019 and
will have an impact on the Medicare beneficiaries. 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 Act requires us to prepare an
RIA 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. This annual notice
announces the Medicare Part A premiums for CY 2019 and will have an
impact on the Medicare beneficiaries. As a result, 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 2018, that
threshold is approximately $150 million. This notice does not impose
mandates that will have a consequential effect of $150 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
[[Page 52458]]
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.
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.
Consistent with the Congressional Review Act provisions of the
Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C.
801 et seq.), this notice has been transmitted to the Congress and the
Comptroller General for review.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Although this notice does not constitute a substantive rule, we
nevertheless prepared this Impact Analysis in the interest of ensuring
that the impacts of this notice are fully understood.
Dated: October 3, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: October 11, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-22529 Filed 10-12-18; 11:15 am]
BILLING CODE 4120-01-P