Record Medicare premium jump coming

? In the largest increase in the history of Medicare, insurance premiums paid by elderly and disabled patients for routine care will rise 17 percent next year, the Bush administration said Friday.

The premium hikes, announced in late afternoon as the capital emptied for the three-day Labor Day holiday and Republicans wound up a jubilant week at their convention in New York, would affect nearly all of the 41.8 million beneficiaries of Medicare.

The boost from $66.60 to $78.20 a month is the largest increase in the program’s 40-year history. The premiums are for Medicare Part B, which provides Medicare patients with coverage for physician services, outpatient hospital care, certain home health services and durable medical equipment.

In announcing the $11.60-a-month increase, the government said the higher premiums reflected general growth in health care costs, higher payments to doctors and Medicare modernization.

“The new premiums reflect an enhanced Medicare that is providing seniors and people with disabilities with strengthened access to physician services and new preventive benefits,” said Dr. Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services (CMS).

Advocates for elderly and disabled beneficiaries said the extra costs would burden many of those who rely on the program.

“This is going to make it even harder for a lot of older Americans to make ends meet,” said Robert M. Hayes, president of the Medicare Rights Center. “Already there are a lot of older people who are teetering on the edge of poverty.”

Advocates for patients blamed the Medicare Modernization bill pushed by insurance interests, passed by Congress and signed by Bush last December as being responsible for the higher costs.

“There were a lot of giveaways in the MMA,” said Hayes. “The prescription drug benefit starts in 2006, but the benefits for insurers start immediately.”

McClellan announced other increases for Medicare services Friday. The deductibles for the program’s Part A, which covers inpatient hospital care, skilled nursing facilities and some home health care, will rise by $36, to $912 when admitted as an inpatient and increased per-day costs for lengthy hospitalizations.

McClellan cited three main reasons for the increases: higher payments due in large part to extra costs under the landmark modernization bill; extra benefits under the new Medicare Advantage program; and the need to increase reserves in program trust funds.