CMS Announces 2013 Medicare Premiums and Deductibles

CMS has announced the calendar year 2013 deductible and premium rates for Medicare Parts A and B. Modest increases were seen, although the Medicare Part A premium for voluntarily enrolled, uninsured individuals decreased. Notably, in creating a contingency margin for the 2013 Part B premium, CMS assumed that the Congress would not allow the impending physician fee schedule increases or the scheduled sequestration of benefits payment cap to take effect.

Medicare Part A

In calculating the 2013 inpatient hospital deductible, CMS estimated that the majority of hospitals would submit quality data and receive the full market basket payment update and the multifactor productivity (MFP) adjustment.

  • The 2013 inpatient hospital deductible is $1,184.
  • The daily coinsurance amount for days 61 through 90 of hospital stays will be $296.
  • The daily coinsurance amount for lifetime reserve days will be $592.
  • The daily coinsurance amount for beneficiaries receiving extended care services at a skilled nursing facility for days 21 through 100 will be $148.

Uninsured beneficiaries who voluntarily enroll in Part A will pay a $441 monthly premium. Voluntary enrollees who are entitled to reduced premiums will pay $243 each month. Voluntary enrollees are expected to pay $75 million less than they paid in 2012.

Medicare Part B

CMS also calculated monthly actuarial rates, monthly premium rates, and annual deductibles for Part B beneficiaries. CMS announced that the standard monthly premium rate for 2013 is $104.90. However, individuals who file individual tax returns with income over $85,000 and those who file joint tax returns with joint incomes greater than $170,000, as well as those married persons who file individual tax returns, will 35, 50, 65, or 80 percent more. The premium rate increased by 5 percent. The annual Part B deductible is $147.

Contingency Margin and Scheduled Payment Cuts

When making its calculations, CMS maintained a contingency margin in the event that actual costs surpass anticipated costs. This year, CMS found that the two most important factors affecting its calculation of the contingency margin were the impending changes to the physician fee schedule that are scheduled to result in a nearly 30 percent reduction in physician fees; and anticipated sequestration, mandated by the Budget Control Act of 2011 (P.L. 112-125), that could decrease benefit payments by up to 2 percent and result in a $4.3 billion reduction in expenditures. CMS explicitly stated that the Secretary of HHS directed the agency, when calculating the contingency margin, to assume that Congress would change the physician fee decrease to 0 percent. In making its calculation, CMS also assumed that the sequestration requirements would be either reduced or postponed. Although far from controlling, the agency’s assumptions could be cause for cautious optimism among providers and beneficiaries who anxious about the potential cuts.

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  1. […] When making its calculations, CMS maintained a contingency margin in the event that actual costs surpass anticipated costs. This year, CMS found that the two most important factors affecting its calculation of the contingency margin were the impending changes to the physician fee schedule that are scheduled to result in a nearly 30 percent reduction in physician fees; and anticipated sequestration, mandated by the Budget Control Act of 2011 (P.L. 112-125), that could decrease benefit payments by up to 2 percent and result in a $4.3 billion reduction in expenditures. CMS explicitly stated that the Secretary of HHS directed the agency, when calculating the contingency margin, to assume that Congress would change the physician fee decrease to 0 percent. In making its calculation, CMS also assumed that the sequestration requirements would be either reduced or postponed. Although far from controlling, the agency’s assumptions could be cause for cautious optimism among providers and beneficiaries who anxious about the potential cuts.Source: wolterskluwerlb.com […]