Medicare Has Lower Than Expected Premium Increases

November 9, 2011

As the November 23 deadline for the Super Committee fast approaches, the Partnership to Fight Chronic Disease continues to advocate for reforms that strengthen Medicare and Medicaid while pulling costs from the system.  There is a lot at stake for the future of these programs, and, more importantly, the people they serve.  In addition to deliberations by the Super Committee, there were several recent announcements affecting Medicare worth noting:

  • It’s open enrollment time for Medicare beneficiaries.  Open enrollment started earlier this year to give people more time to compare their coverage options and choice the ones that best fit their needs.  More information is available at
  • Seniors got a bit of good news this year with respect to premiums, with Medicare Part B premiums only going up $3.50 in 2012.  In addition, average premiums under Part D did not increase above 2011 premiums and seniors hitting the “donut hole” in drug coverage will continue to save 50 percent on those costs.  An article in U.S. News and World Report examined how Medicare Part B premiums will affect Social Security checks in 2012.  In the article, Andrew Biggs, a resident scholar at the American Enterprise Institute and a former deputy commissioner of the Social Security Administration, stated, "The fear was that when we did get a [Social Security] cost-of-living adjustment that Part B premiums would shoot up and eat most of the Social Security benefit increases that seniors will receive, but it looks like that's not the case."
  • Last week, the Center for Medicare & Medicaid Services (CMS) announced changes to payment policies and rates for physicians and nonphysician practitioners (NPPs) for services paid under the Medicare Physician Fee Schedule (MPFS) for the 2012 calendar year. In an effort to ensure to ensure that Medicare beneficiaries continue to have access to vital services and that Medicare is accurately paying for physician services that may have been historically undervalued by the fee system, CMS is expanding the potentially misvalued code initiative. This year, CMS is focusing on the codes billed by physicians in each specialty that result in the highest Medicare expenditures under the MPFS to determine whether these codes are overvalued. In the past, CMS has targeted specific codes for review that may have affected a few procedural specialties like cardiology, radiology or nuclear medicine but has not taken a look at the highest expenditure codes across all specialties. In changing this model, CMS hopes to reimburse physicians in line with the services they’re providing.
  • BusinessWeek reported that under these CMS payment policy changes, Medicare payments for outpatient services will rise 1.9 percent to $41 billion and payments for outpatient services delivered at designated cancer hospitals will increase 11.3 percent, or about $71 million in 2012, as called for under the 2010 health- care law. Reimbursements to ambulatory service centers will rise 1.6 percent to $3.5 billion.

In an effort to prevent and treat chronic illnesses as a means to reduce overall health care spending in the United States, PFCD strongly advocates for the integration of better care management systems to deliver more efficient, cost-effective care.