Record Increase in Medicare Premiums

September 3, 2004
The Bush Administration announced a record hike in Medicare premiums -- 17.4 percent rise to $78.20 a month. It's the largest one-step increase since the program began in 1965.

Patients with chronic conditions that require a lot of hospital care will face an increase in out-of-pocket expense charges, to $228 a day from $219 after they spend 30 days in hospital, and to $456 a day from $438 after 90 days.

In addition, as a result of the Republican Medicare Modernization Act of 2003, the Part B deductible is increasing to $110 in 2005, and inflating annually thereafter. The last time the Part B deductible increased was 1991.

It's expected the sharply higher charges may push more elderly people to join Medicare health maintenance organizations operated by private companies.

"This is a double whammy for America's 40 million Medicare beneficiaries," said Rep. Pete Stark (D-Calif), Ranking Member on the Health Subcommittee of the Committee on Ways and Means.

"Record high Medicare premium increases, coupled with an increase in the deductible, will make it even harder for those on fixed incomes to access Medicare benefits. Once more, payoffs to HMOs are hurting those in traditional Medicare," Stark said.

The Bush administration raised government subsidies to health maintenance organizations last January. About $1.75 of next year's $11.60 premium increase is meant to help cover the federal subsidies.

"This Administration has had four years to improve Medicare and instead have made it worse. Today's news reflects the reality, not rhetoric, of this Administration's bad record on Medicare," Stark said.

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