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Basic Medicare counts on physician fee cuts

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The Centers for Medicare & Medicaid Services (CMS) will be reducing the monthly premium for people who buy Medicare Part A hospitalization insurance for 2015 and keeping the premium for Medicare Part B physician services and outpatient services insurance the same.

CMS announced the 2015 traditional Medicare plan rates in a pair of announcements set to appear in the Federal Register Friday.

The full monthly price of Part A coverage will fall 4.5 percent, to $407. The standard monthly price for Part B coverage will continue to be $104.90, and the deductible will continue to be $147.

A CMS actuarial analysis of the Part B premiums shows that the biggest factor helping to hold down premiums will be a sharp cut in physician fees. CMS is hoping to cut physician payments for enrollees over age 65 about 14 percent, to $65 per enrollee per month and to cut the physician fee schedule for disabled enrollees about 16 percent, to about $70 per enrollee per month.

The Medicare program serves a total of 54 million people.

See also: Everything you need to know about Medicare Parts A, B, C and D

Just about all older U.S. residents and all disabled U.S. residents who qualify for Medicare have Part A coverage, but most get the coverage without having to pay an out-of-pocket premium. CMS officials estimate that 644,000 people — mainly people who have not worked long enough in the United States to qualify for premium-free Part A coverage — will have to pay the full premium. Another 58,000 people will pay a discounted premium for Part A coverage.

Forty-nine million people have Part B coverage.

The rate announcement means that the millions of American voters who have traditional Medicare coverage will go to the fall elections without thinking about increases in the cost of basic Medicare premium rates.

Changes in Medicare rates can affect prices in the commercial market as well. Private plans may look at Medicare as a model when negotiating rates and provider network agreements. Shifts in Medicare provider pay can also affect how likely providers are to try to make up for what they see as shortfalls by increasing fees for patients with commercial coverage.


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