[Federal Register Volume 60, Number 199 (Monday, October 16, 1995)]
[Notices]
[Pages 53631-53632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25520]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
[OACT-051-N]
RIN 0938-AH06
Medicare Program; Part A Premium for 1996 for the Uninsured Aged
and for Certain Disabled Individuals Who Have Exhausted Other
Entitlement
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the hospital insurance premium for
calendar year 1996 under Medicare's hospital insurance program (Part A)
for the uninsured aged and for certain disabled individuals who have
exhausted other entitlement. The monthly Medicare Part A premium for
the 12 months beginning January 1, 1996 for these individuals is $289.
The reduced premium for certain other individuals as described in this
notice is $188. Section 1818(d) of the Social Security Act specifies
the method to be used to determine these amounts.
EFFECTIVE DATE: This notice is effective on January 1, 1996.
FOR FURTHER INFORMATION CONTACT: John Wandishin, (410) 786-6389.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1818 of the Social Security Act (the Act) provides for
voluntary enrollment in the Medicare hospital insurance program
(Medicare Part A), subject to payment of a monthly premium, of certain
persons who are age 65 and older, uninsured for social security or
railroad retirement benefits, and do not otherwise meet the
requirements for entitlement to Medicare Part A. (Persons insured under
the Social Security or Railroad Retirement Acts need not pay premiums
for hospital insurance.)
Section 1818(d) of the Act requires us to estimate, on an average
per capita basis, the amount to be paid from the Federal Hospital
Insurance Trust Fund for services performed and for related
administrative costs incurred in the following year with respect to
individuals age 65 and over who will be entitled to benefits under
Medicare Part A. We must then, during September of each year, determine
the monthly actuarial rate (the per capita amount estimated above
divided by 12) and publish the dollar amount to be applicable for the
monthly premium in the succeeding year. If the premium is not a
multiple of $1, the premium is rounded to the nearest multiple of $1
(or, if it is a multiple of 50 cents but not of $1, it is rounded to
the next highest $1). The 1995 premium under this method was $261 and
was effective January 1995. (See 59 FR 61626, December 1, 1994.)
Section 1818(d)(2) of the Act requires us to determine and publish,
during September of each calendar year, the amount of the monthly
premium for the following calendar year for persons who voluntarily
enroll in Medicare Part A.
Section 1818A of the Act provides for voluntary enrollment in
Medicare Part A, subject to payment of a monthly premium, of certain
disabled individuals who have exhausted other entitlement. These
individuals are those not now entitled but who have been entitled under
section 226(b) of the Act, continue to have the disabling impairment
upon which their entitlement was based, and whose entitlement ended
solely because they had earnings that exceeded the substantial gainful
activity amount (as defined in section 223(d)(4) of the Act).
Section 1818A(d)(2) of the Act specifies that the premium
determined under section 1818(d)(2) of the Act for the aged will also
apply to certain disabled individuals as described above.
In addition, section 1818(d) of the Act provides for a reduction in
the monthly premium amount for certain voluntary enrollees. The
reduction applies for individuals who are not eligible for social
security or railroad retirement benefits but who:
Had at least 30 quarters of coverage under title II of the
Act;
Were married and had been married for the previous 1-year
period to an individual who had at least 30 quarters of coverage;
Had been married to an individual for at least 1 year at
the time of the individual's death and the individual had at least 30
quarters of coverage; or
Are divorced from an individual who at the time of divorce
had at least 30 quarters of coverage and the marriage lasted at least
10 years.
For calendar year 1996, section 1818(d)(4)(A) of the Act specifies
that the monthly premium that these individuals will pay for calendar
year 1996 will be equal to the monthly premium for aged voluntary
enrollees reduced by 35 percent.
II. Premium Amount for 1996
Under the authority of sections 1818(d)(2) and 1818A(d)(2) of the
Act, we have determined that the monthly Medicare Part A hospital
insurance premium for the uninsured aged and for
[[Page 53632]]
certain disabled individuals who have exhausted other entitlement for
the 12 months beginning January 1, 1996 is $289.
The monthly premium for those individuals entitled to a 35 percent
reduction in the monthly premium for the 12-month period beginning
January 1, 1996 is $188.
III. Statement of Actuarial Assumptions and Bases Employed in
Determining the Monthly Premium Rate
As discussed in section I of this notice, the monthly Medicare Part
A premium for 1996 is equal to the estimated monthly actuarial rate for
1996 rounded to the nearest multiple of $1. The monthly actuarial rate
is defined to be one-twelfth of the average per capita amount that the
Secretary estimates will be paid from the Federal Hospital Insurance
Trust Fund for services performed and related administrative costs
incurred in 1996 for individuals age 65 and over who will be entitled
to benefits under the hospital insurance program. Thus, the number of
individuals age 65 and over who will be entitled to hospital insurance
benefits and the costs incurred on behalf of these beneficiaries must
be projected to determine the premium rate.
The principal steps involved in projecting the future costs of the
hospital insurance program are (a) establishing the present cost of
services furnished to beneficiaries, by type of service, to serve as a
projection base; (b) projecting increases in payment amounts for each
of the various service types; and (c) projecting increases in
administrative costs. Establishing historical Medicare Part A
enrollment and projecting future enrollment, by type of beneficiary, is
part of this process.
We have completed all of the above steps, basing our projections
for 1996 on (a) current historical data and (b) projection assumptions
under current law from the Midsession Review of the President's Fiscal
Year 1996 Budget. It is estimated that in calendar year 1996, 32.496
million people age 65 and over will be entitled to Medicare Part A
benefits (without premium payment), and that these individuals will, in
1996, incur $112.688 billion of benefits for services performed and
related administrative costs. Thus, the estimated monthly average per
capita amount is $288.98 and the monthly premium is $289. The monthly
premium for those individuals eligible to pay this premium reduced by
35 percent is $188.
IV. Costs to Beneficiaries
The 1996 Medicare Part A premium is about 11 percent higher than
the $261 monthly premium amount for the 12-month period beginning
January 1, 1995.
We estimate that there will be, in calendar year 1996,
approximately 304,000 enrollees who will voluntarily enroll in Medicare
Part A by paying the full premium and who do not otherwise meet the
requirements for entitlement. An additional 5,000 enrollees will be
paying the reduced premium. The estimated overall effect of the changes
in the premium will be a cost to these voluntary enrollees of about
$100 million.
V. Impact Statement
This notice merely announces amounts required by statute. This
notice is not a proposed rule or a final rule issued after a proposal,
and it does not alter any regulation or policy. Therefore, we have
determined, and certify, that no analyses are required under the
Regulatory Flexibility Act (5 U.S.C 601 through 612) or section 1102(b)
of the Act.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Authority: Sections 1818(d)(2) and 1818A(d)(2) of the Social
Security Act (42 U.S.C. 1395i-2(d)(2) and 1395i-2a(d)(2)).
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 26, 1995.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: September 29, 1995.
Donna E. Shalala,
Secretary.
[FR Doc. 95-25520 Filed 10-13-95; 8:45 am]
BILLING CODE 4120-01-P
