2005-04-06 / Seniors

Medicare Premium Due For Another Increase In 2006

The second quarter of 2005 has only just begun and already health officials in Washington have announced that the Medicare premium will go up by $11 a month for each member, to $89.20.

Medicare members are currently paying $78.20 a month for 2005. That represented an increase of $11.60 from what they paid in 2004 ($66.60). Assuming there will be no change in the announcement that the 2006 premium will be $89.20, the premium for the seniors’ health care plan will have had increased by $22.66 over a two-year period.

A truer way of showing the impact of these increases is to show the annual cost from year to year.

In 2004, it was $799.20, in 2005, it will be $838.40, and In 2006, it will be $970.40

The cost of the Medicare premium is usually compared to the annual cost of living, or COLA, increase in retirees’ Social Security benefits. Needless to say, we can hardly expect that it will increase as sharply as the Medicare premium. It certainly didn’t at the beginning of this year.

As officials announced the projected 2006 Medicare premium, they also announced that they plan to reduce what they pay doctors for each visit a Medicare member makes to a physician’s office.

This is another indication that the cost of Medicare is moving upward by leaps and bounds, the first being the increase in the Medicare premium. Medicare’s 40 million or so members can look forward to having to pay more out of pocket for health care in the future. Not only will doctor and hospital care costs go up, but so possibly, also will prescription drug care when the new coverage for that kicks in at the beginning of next year. Under that new program, whoever opts to sign up for it will pay an average of $35 a month.

Medicare members have to face the fact that their healthcare costs are going to be higher in future years. For some of our wealthier seniors, that may not be too much of a problem. But for those who can’t afford the extra expenditure—middle-income and low income people—there are many concerns. This is true also because Medicaid, the health care program for low-income families, is also being reduced sharply, so there’s no escape hatch.

In the broader sense, we are now beginning to hear that not only Social Security, but Medicare, too, is in dire straits looking into the future. And the Bush presidential administration and Congress are going to have a hard time trying to keep those two programs, which pay such an important part in seniors’ lives, in existence.

The only way to bolster the two vital programs, we fear, is for seniors to accept more of the costs of Medicare while hoping that Social Security is in good enough shape to pay the current level of benefits. It may mean that the retirement age will have to be lifted, or perhaps retirement may have to be delayed for a while longer. Some seniors who are already retired may have to return to the work force either full time or part-time. There are no easy answers.

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