[Federal Register Volume 84, Number 219 (Wednesday, November 13, 2019)]
[Notices]
[Pages 61622-61625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24439]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-8072-N]
RIN 0938-AT77


Medicare Program; CY 2020 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) 2020. 
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, 2020 for these individuals will be $458. 
The premium for certain other individuals as described in this notice 
will be $252.

DATES: The premium announced in this notice is effective on January 1, 
2020.

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

[[Page 61623]]

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 2020 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 
any Medicare late enrollment penalties that the individual may owe and 
would allow states to enroll persons in Part A at any time of the year 
(without regard to Medicare enrollment periods)).

II. Monthly Premium Amount for CY 2020

    The monthly premium for the uninsured aged and certain disabled 
individuals who have exhausted other entitlement for the 12 months 
beginning January 1, 2020, is $458. 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 $252.

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 2020 
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 2020 on--(1) current historical 
data; and (2) projection assumptions derived from current law and the 
Mid-Session Review of the President's Fiscal Year 2020 Budget.
    We estimate that in CY 2020, 53,313,570 people aged 65 years and 
over will be entitled to (enrolled in) benefits (without premium 
payment) and that they will incur about $292.967 billion in benefits 
and related administrative costs. Thus, the estimated monthly average 
per capita amount is $457.93 and the monthly premium is $458. 
Subsequently, the full monthly premium reduced by 45 percent is $252.

IV. Costs to Beneficiaries

    The CY 2020 premium of $458 is approximately 4.8 percent higher 
than the CY 2019 premium of $437. We estimate that approximately 
691,000 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 2020 reduced premium 
of $252 is approximately 5.0 percent higher than the CY 2019 premium of 
$240. We estimate an additional 80,000 enrollees will pay the reduced 
premium. Therefore, we estimate that the total aggregate cost to 
enrollees paying these premiums in CY 2020, compared to the amount that 
they paid in CY 2019, will be about $186 million.

V. Waiver of Proposed Rulemaking

    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 1871 of the Act and section 553(b) of 
the Administrative Procedure Act (APA). Section 1871(a)(2) of the Act 
provides that no rule, requirement, or other statement of policy (other 
than a national coverage determination) that establishes or changes a 
substantive legal standard governing the scope of benefits, the payment 
for services, or the eligibility of individuals, entities, or 
organizations to furnish or receive services or benefits under Medicare 
shall take effect unless it is promulgated through notice and comment 
rulemaking. Unless there is a statutory exception, section 1871(b)(1) 
of the Act generally requires the Secretary of the Department of Health 
and Human Services (the Secretary) to provide for notice of a proposed 
rule in the Federal Register and provide a period of not less than 60 
days for public comment before establishing or changing a substantive 
legal standard regarding the matters enumerated by the statute. 
Similarly, under 5 U.S.C. 553(b) of the APA, the agency is required to 
publish a notice of proposed rulemaking in the Federal Register before 
a substantive rule takes effect. Section 553(d) of the APA and section 
1871(e)(1)(B)(i) of the Act usually require a 30-day delay in effective 
date after issuance or publication of a rule, subject to exceptions. 
Sections 553(b)(B) and 553(d)(3) of the APA provide for exceptions from 
the advance notice and comment requirement and the delay in effective 
date requirements. Sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the 
Act also provide exceptions from the notice and 60-day comment period 
and the 30-day delay in effective date. Section 553(b)(B) of the APA 
and section 1871(b)(2)(C) of the Act expressly authorize an agency to 
dispense with notice and comment rulemaking for good cause if the 
agency makes a finding that notice and comment procedures are 
impracticable, unnecessary, or contrary to the public interest.
    The annual Part A premium announcement set forth in this notice 
does not establish or change a substantive legal standard regarding the 
matters enumerated by the statute or constitute a substantive rule 
which would be subject to the notice requirements in section 553(b) of 
the APA. However, to the extent that an opportunity for public notice 
and comment could be construed as required for this notice, we find 
good cause to waive this requirement.
    Section 1818(d) of the Act requires 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. Further, 
the statute requires that the agency

[[Page 61624]]

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 2020. We 
have calculated the Part A premiums as directed by the statute; the 
statute establishes both when the premium amounts must be published and 
the information that the Secretary must factor into the premium 
amounts, so we do not have any discretion in that regard. We find 
notice and comment procedures to be unnecessary for this notice and we 
find good cause to waive such procedures under section 553(b)(B) of the 
APA and section 1871(b)(2)(C) of the Act, if such procedures may be 
construed to be required at all. Through this notice, we are simply 
notifying the public of the updates to the Medicare Part A premiums, in 
accordance with the statute, for CY 2020. As such, we also note that 
even if notice and comment procedures were required for this notice, 
for the reasons stated above, we would find good cause to waive the 
delay in effective date of the notice, as additional delay would be 
contrary to the public interest under section 1871(e)(1)(B)(ii) of the 
Act. Publication of this notice is consistent with section 1818(d) of 
the Act, and we believe that any potential delay in the effective date 
of the notice, if such delay were required at all, could cause 
unnecessary confusion both for the agency and Medicare beneficiaries.

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 $186 million.
    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 being nonprofit organizations 
or by meeting the Small Business Administration's definition of a small 
business (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 2020 and will have an impact on certain 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 and has fewer 
than 100 beds. This annual notice announces the Medicare Part A 
premiums for CY 2020 and will have an impact on certain 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 2019, that 
threshold is approximately $154 million. This notice does not impose 
mandates that will have a consequential effect of $154 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. This notice will not have a substantial direct effect on 
state or local

[[Page 61625]]

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.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.
    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.
    Although this notice does not constitute a substantive rule, we 
nevertheless prepared this Impact Analysis section in the interest of 
ensuring that the impacts of this notice are fully understood.

    Dated: October 24, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: October 28, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-24439 Filed 11-8-19; 4:15 pm]
BILLING CODE 4120-01-P