Medicare program; monthly actuarial rates and Part B premium rates beginning January 1, 1988--HCFA. Notice.
This notice announces the monthly actuarial rates for aged (age 65 or over) and disabled (under age 65) enrollees in the Medicare Supplementary Medical Insurance (SMI) program for calendar year 1988. It also announces the monthly SMI premium rate to be paid by all enrollees during calendar year 1988. The 1988 monthly Part B premium will be increased from $17.90 to $24.80. The $6.90 increase in the SMI premium is a result of several factors. First, because the trust fund reserve at the end of 1986 was larger tan necessary to provide an adequate program contingency, the actuarial rate, and hence the premium, promulgated for 1987 was, as for the two previous years, set at a level lower than would otherwise have been required to finance projected 1987 expenditures. This reduced the 1987 premium by $1.43. In contrast, because the trust fund has since been reduced to the minimum level, the 1988 premium is increased by 6.5 cents to replenish the trust fund reserves. The difference between the $1.43 negative contingency margin for 1987 and the positive margin of 6.5 cents of 1988 accounts for $1.50 of the premium increase. Second, our current estimate of 1987 expenditures is 12.1 percent higher than projected at the time we promulgated the 1987 premium. Finally, we estimate Part B expenditures to increase b 13.9 percent in 1988. Almost 60 percent of the premium increase is due to growth in physician expenditures; from 1984 through 1988, Part B spending for physicians' services is growing at 11.5 percent annually.
D000206:Actuarial Analysis; D014487:Centers for Medicare and Medicaid Services, U.S.; D005249:Fees and Charges / Q000331:legislation & jurisprudence*; D007357:Insurance, Physician Services / Q000331:legislation & jurisprudence*; D006278:Medicare / Q000331:legislation & jurisprudence*; D011907:Rate Setting and Review / Q000331:legislation & jurisprudence*; D014481:United States