Medicare Part B premiums to rise $5 a month in 2013

Tavenner also announced that Medicare’s hospitalization deductible will increase by $28, to $1,184. The deductible is the amount a person must pay before health insurance kicks in. Many seniors have some form of additional coverage to handle their Medicare hospital deductible.

The annual deductible for outpatient care will increase by $7, to $147.

Coverage for outpatient care under Medicare Part B is optional, but more than 90 percent of the program’s 52 million beneficiaries sign up. Medicare covers people 65 and older, the disabled and those with serious kidney disease.

Part B pays for office visits to doctors, preventive services and medical equipment. It’s a good deal by any measure, since 75 percent of the cost is borne by taxpayers, with premiums set to cover the remaining 25 percent. Still, many beneficiaries are on tight budgets so the monthly premium is a closely watched indicator.

Last month the government announced a 1.7 percent cost-of-living increase for the 56 million Americans on Social Security. That works out to raises averaging $19 a month come January. The typical increase for retired workers will be slightly larger.

Drafters of the Patient Protection and Affordable Care Act (PPACA) have tried to rein in Medicare spending by curtailing payments to hospitals, insurers, drug companies and other service providers. Democrats want to focus the next round of cuts on providers, particularly pharmaceutical companies. But Republicans are looking for more significant changes in the program, such as increasing the eligibility age to 67.

PPACA added preventive care benefits for basic Medicare recipients and changed the Medicare Part D prescription drug program. PPACA also called for CMS to experiment with new strategies for reimburse the doctors who treat Medicare enrollees, and the law set up a cost control board in an effort to hold down future Medicare spending on health care.