[Federal Register Volume 61, Number 214 (Monday, November 4, 1996)]
[Notices]
[Pages 56691-56693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28141]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
[OACT-053-N]
RIN 0938-AH45
Medicare Program; Part A Premium for 1997 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 1997 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, 1997 for these individuals is $311.
The reduced premium for certain other individuals as described in this
notice is $187. 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, 1997.
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
[[Page 56692]]
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 month 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 1996 premium under this method was $289 and
was effective January 1, 1996. (See 60 FR 53631, October 16, 1995.)
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.
Section 13508 of the Omnibus Budget Reconciliation Act of 1993
(Public Law 103-66, enacted on August 10, 1993) amended section 1818(d)
of the Act to provide 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 1997, section 1818(d)(4)(A) of the Act, specifies
that the monthly premium that these individuals will pay for calendar
year 1997 will be equal to the monthly premium for aged voluntary
enrollees reduced by 40 percent.
II. Premium Amount for 1997
Under the authority of sections 1818(d)(2) and 1818A(d)(2) of the
Act, the Secretary has determined that the monthly Medicare Part A
hospital insurance premium for the uninsured aged and for certain
disabled individuals who have exhausted other entitlement for the 12
months beginning January 1, 1997, is $311.
The monthly premium for those individuals entitled to a 40 percent
reduction in the monthly premium for the 12-month period beginning
January 1, 1997 is $187.
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 1997 is equal to the estimated monthly actuarial rate for
1997 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 1997 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 1997 on (a) current historical data and (b) projection assumptions
under current law from the Midsession Review of the President's Fiscal
Year 1997 Budget. It is estimated that in calendar year 1997, 32.809
million people age 65 and over will be entitled to Medicare Part A
benefits (without premium payment), and that these individuals will, in
1997, incur $122.621 billion of benefits for services performed and
related administrative costs. Thus, the estimated monthly average per
capita amount is $311.45 and the monthly premium is $311. The monthly
premium for those individuals eligible to pay this premium reduced by
40 percent is $187.
IV. Costs to Beneficiaries
The 1997 Medicare Part A premium is about 8 percent higher than the
$289 monthly premium amount for the 12-month period beginning January
1, 1996.
We estimate that there will be, in calendar year 1997,
approximately 324,000 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 9,000 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 $90
million.
V. Waiver of Notice of Proposed Rulemaking
The Medicare statute, as discussed previously, requires publication
of the Medicare Part A hospital insurance premium for the upcoming
calendar year during September of each year. The amounts are determined
according to the statute. As has been our custom, we use general
notices, rather than formal notice and comment rulemaking procedures,
to make such announcements. In doing so, we acknowledge that, under the
Administrative Procedure Act, interpretive rules, general statements of
policy, and rules of agency organization, procedure, or practice are
excepted from the requirements of notice and comment rulemaking.
We considered publishing a proposed notice to provide a period for
public comment. However, we may waive that procedure if we find good
cause that prior notice and comment are impracticable, unnecessary, or
contrary to the public interest. We find that the procedure for notice
and comment is unnecessary because the formula used
[[Page 56693]]
to calculate the Part A hospital insurance premium is statutorily
directed, and we can exercise no discretion in following that formula.
Moreover, the statute established the time period for which the premium
will apply and delaying publication of the premium amount would be
contrary to the public interest. Therefore, we find good cause to waive
publication of a proposed notice and solicitation of public comments.
VI. Impact Statement
This notice merely announces amounts required by legislation. 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 Executive
Order 12866, 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 10, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: September 27, 1996.
Donna E. Shalala,
Secretary.
[FR Doc. 96-28141 Filed 11-1-96; 8:45 am]
BILLING CODE 4120-01-M
