Elderly should expect another big jump in Medicare premiums

The elderly will face another double-digit rise in their Medicare premiums next year, resulting in monthly payments of nearly $100.

The monthly premiums for supplementary medical insurance will rise from $88.50 to at least $98.40, the Bush administration projected Tuesday. That’s an 11.2 percent increase, and it’s possible the amount will be slightly higher.

The projections assume Congress will reduce Medicare payment rates for physicians by about 4.7 percent next year. Many analysts don’t believe such a cut will occur, and that means the cost of the insurance would go higher than current projections.

Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, says the higher premiums are being generated through an increase in the volume of care provided Medicare patients. Doctors make greater use of imaging, physical therapy, lab tests and physician-administered drugs.

Physicians say the increased volume usually equates to better care and healthier patients, but a fact sheet released by CMS on Tuesday said “use of these services varies substantially across practices and geographic areas, with no clear impacts on health.”