Medicare Program; Medicare Part B Monthly Actuarial Rates, Premium Rate, and Annual Deductible Beginning January 1, 2009, 55089-55096 [E8-22314]
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Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on State and local
governments, preempts State law, or
otherwise has Federalism implications.
This notice will not have a substantial
effect on State or local governments.
In accordance with the provisions of
Executive Order 12866, this notice was
reviewed by the Office of Management
and Budget.
rate was also $96.40.) The Part B
deductible for 2009 is $135.00 for all
Part B beneficiaries. If a beneficiary has
to pay an income-related monthly
adjustment, they may have to pay a total
monthly premium of about 35, 50, 65,
or 80 percent of the total cost of Part B
coverage.
DATES: Effective Date: January 1, 2009.
FOR FURTHER INFORMATION CONTACT: M.
Kent Clemens, (410) 786–6391.
SUPPLEMENTARY INFORMATION:
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance)
Part B is the voluntary portion of the
Medicare program that pays all or part
of the costs for physicians’ services,
outpatient hospital services, certain
home health services, services furnished
by rural health clinics, ambulatory
surgical centers, comprehensive
outpatient rehabilitation facilities, and
certain other medical and health
services not covered by Medicare Part
A, Hospital Insurance. Medicare Part B
is available to individuals who are
entitled to Medicare Part A, as well as
to U.S. residents who have attained age
65 and are citizens, and aliens who were
lawfully admitted for permanent
residence and have resided in the
United States for 5 consecutive years.
Part B requires enrollment and payment
of monthly premiums, as provided for
in 42 CFR part 407, subpart B, and part
408, respectively. The difference
between the premiums paid by all
enrollees and total incurred costs is met
by payments from the Supplementary
Medical Insurance Fund.
The Secretary of the Department of
Health and Human Services (the
Secretary) is required by section 1839 of
the Social Security Act (the Act) to
announce the Part B monthly actuarial
rates for aged and disabled beneficiaries
as well as the monthly Part B premium.
The Part B annual deductible is
included because its determination is
directly linked to the aged actuarial rate.
The monthly actuarial rates for aged
and disabled enrollees are used to
determine the correct amount of general
revenue financing per beneficiary each
month. These amounts, according to
actuarial estimates, will equal,
respectively, one-half the expected
average monthly cost of Part B for each
aged enrollee (age 65 or over) and onehalf the expected average monthly cost
of Part B for each disabled enrollee
(under age 65).
The Part B deductible to be paid by
enrollees is also announced. Prior to the
Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA) (Pub. L. 108–173), the Part
B deductible was set in statute. After
Dated: August 28, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Dated: September 5, 2008.
Michael O. Leavitt,
Secretary.
[FR Doc. E8–22310 Filed 9–19–08; 9:00 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
[CMS–8036–N]
RIN 0938–APOO
Medicare Program; Medicare Part B
Monthly Actuarial Rates, Premium
Rate, and Annual Deductible
Beginning January 1, 2009
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Notice.
jlentini on PROD1PC65 with NOTICES
AGENCY:
SUMMARY: This notice announces the
monthly actuarial rates for aged (age 65
and over) and disabled (under age 65)
beneficiaries enrolled in Part B of the
Medicare Supplementary Medical
Insurance (SMI) program beginning
January 1, 2009. In addition, this notice
announces the monthly premium for
aged and disabled beneficiaries as well
as the income-related monthly
adjustment amounts to be paid by
beneficiaries with modified adjusted
gross income above certain threshold
amounts. The monthly actuarial rates
for 2009 are $192.70 for aged enrollees
and $224.20 for disabled enrollees. The
standard monthly Part B premium rate
for 2009 is $96.40, which is equal to 50
percent of the monthly actuarial rate for
aged enrollees or approximately 25
percent of the expected average total
cost of Part B coverage for aged
enrollees. (The 2008 standard premium
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I. Background
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55089
setting the 2005 deductible amount at
$110.00, section 629 of the MMA
(amending section 1833(b) of the Act)
requires that the Part B deductible be
indexed beginning in 2006. The
inflation factor to be used each year is
the annual percentage increase in the
Part B actuarial rate for enrollees age 65
and over. Specifically, the 2009 Part B
deductible is calculated by multiplying
the 2008 deductible by the ratio of the
2009 aged actuarial rate over the 2008
aged actuarial rate. The amount
determined under this formula is then
rounded to the nearest $1.
The monthly Part B premium rate to
be paid by aged and disabled enrollees
is also announced. (Although the costs
to the program per disabled enrollee are
different than for the aged, the statute
provides that they pay the same
premium amount.) Beginning with the
passage of section 203 of the Social
Security Amendments of 1972 (Pub. L.
92–603), the premium rate, which was
determined on a fiscal year basis, was
limited to the lesser of the actuarial rate
for aged enrollees, or the current
monthly premium rate increased by the
same percentage as the most recent
general increase in monthly Title II
social security benefits.
However, the passage of section 124
of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA)
(Pub. L. 97–248) suspended this
premium determination process.
Section 124 of TEFRA changed the
premium basis to 50 percent of the
monthly actuarial rate for aged enrollees
(that is, 25 percent of program costs for
aged enrollees). Section 606 of the
Social Security Amendments of 1983
(Pub. L. 98–21), section 2302 of the
Deficit Reduction Act of 1984 (DEFRA
84) (Pub. L. 98–369), section 9313 of the
Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA 85)
(Pub. L. 99–272), section 4080 of the
Omnibus Budget Reconciliation Act of
1987 (OBRA 87) (Pub. L. 100–203), and
section 6301 of the Omnibus Budget
Reconciliation Act of 1989 (OBRA 89)
(Pub. L. 101–239) extended the
provision that the premium be based on
50 percent of the monthly actuarial rate
for aged enrollees (that is, 25 percent of
program costs for aged enrollees). This
extension expired at the end of 1990.
The premium rate for 1991 through
1995 was legislated by section
1839(e)(1)(B) of the Act, as added by
section 4301 of the Omnibus Budget
Reconciliation Act of 1990 (OBRA 90)
(Pub. L. 101–508). In January 1996, the
premium determination basis would
have reverted to the method established
by the 1972 Social Security Act
Amendments. However, section 13571
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of the Omnibus Budget Reconciliation
Act of 1993 (OBRA 93) (Pub. L. 103–66)
changed the premium basis to 50
percent of the monthly actuarial rate for
aged enrollees (that is, 25 percent of
program costs for aged enrollees) for
1996 through 1998.
Section 4571 of the Balanced Budget
Act of 1997 (BBA) (Pub. L. 105–33)
permanently extended the provision
that the premium be based on 50
percent of the monthly actuarial rate for
aged enrollees (that is, 25 percent of
program costs for aged enrollees).
The BBA included a further provision
affecting the calculation of the Part B
actuarial rates and premiums for 1998
through 2003. Section 4611 of the BBA
modified the home health benefit
payable under Part A for individuals
enrolled in Part B. Under this section,
beginning in 1998, expenditures for
home health services not considered
‘‘post-institutional’’ are payable under
Part B rather than Part A. However,
section 4611(e)(1) of the BBA required
that there be a transition from 1998
through 2002 for the aggregate amount
of the expenditures transferred from
Part A to Part B. Section 4611(e)(2) of
the BBA also provided a specific yearly
proportion for the transferred funds.
The proportions were 1/6 for 1998, 1/3
for 1999, 1/2 for 2000, 2/3 for 2001, and
5/6 for 2002. For the purpose of
determining the correct amount of
financing from general revenues of the
Federal Government, it was necessary to
include only these transitional amounts
in the monthly actuarial rates for both
aged and disabled enrollees, rather than
the total cost of the home health
services being transferred.
Section 4611(e)(3) of the BBA also
specified, for the purpose of
determining the premium, that the
monthly actuarial rate for enrollees age
65 and over be computed as though the
transition would occur for 1998 through
2003 and that 1/7 of the cost be
transferred in 1998, 2/7 in 1999, 3/7 in
2000, 4/7 in 2001, 5/7 in 2002, and
6/7 in 2003. Therefore, the transition
period for incorporating this home
health transfer into the premium was 7
years while the transition period for
including these services in the actuarial
rate was 6 years.
Section 811 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (Pub. L. 108–
173, also known as the Medicare
Modernization Act, or MMA), which
amended section 1839 of the Act,
requires that, starting on January 1,
2007, the Part B premium a beneficiary
pays each month be based on their
annual income. Specifically, if a
beneficiary’s ‘‘modified adjusted gross
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income’’ is greater than the legislated
threshold amounts (for 2009, $85,000
for a beneficiary filing an individual
income tax return, and $170,000 for a
beneficiary filing a joint tax return) the
beneficiary is responsible for a larger
portion of the estimated total cost of
Part B benefit coverage. In addition to
the standard 25 percent premium, these
beneficiaries will now have to pay an
income-related monthly adjustment
amount. The MMA made no change to
the actuarial rate calculation, and the
standard premium, which will continue
to be paid by beneficiaries whose
modified adjusted gross income is
below the applicable thresholds, still
represents 25 percent of the estimated
total cost to the program of Part B
coverage for an aged enrollee. However,
once the adjustments are fully phased
in, and depending on income and tax
filing status, a beneficiary could now be
responsible for 35, 50, 65, or 80 percent
of the estimated total cost of Part B
coverage, rather than 25 percent. The
end result of the higher premium is that
the Part B premium subsidy is reduced
and less general revenue financing is
required for beneficiaries with higher
income because they are paying a larger
share of the total cost with their
premium. That is, the premium subsidy
will continue to be approximately 75
percent for beneficiaries with income
below the applicable income thresholds,
but will be reduced for beneficiaries
with income above these thresholds.
The MMA specified that there be a 5year transition to full implementation of
this provision. However, section 5111 of
the Deficit Reduction Act of 2005 (Pub.
L. 109–171) (DRA) modified the
transition to a 3-year period.
Section 4732(c) of the BBA added
section 1933(c) of the Act, which
required the Secretary to allocate money
from the Part B trust fund to the State
Medicaid programs for the purpose of
providing Medicare Part B premium
assistance from 1998 through 2002 for
the low-income Medicaid beneficiaries
who qualify under section 1933 of the
Act. This allocation, while not a benefit
expenditure, was an expenditure of the
trust fund and was included in
calculating the Part B actuarial rates
through 2002. For 2003 through 2007,
the expenditure was made from the trust
fund because the allocation was
temporarily extended. However,
because the extension occurred after the
financing was determined, the
allocation was not included in the
calculation of the financing rates.
A further provision affecting the
calculation of the Part B premium is
section 1839(f) of the Act, as amended
by section 211 of the Medicare
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Catastrophic Coverage Act of 1988
(MCCA 88) (Pub. L. 100–360). (The
Medicare Catastrophic Coverage Repeal
Act of 1989 (Pub. L. 101–234) did not
repeal the revisions to section 1839(f)
made by MCCA 88.) Section 1839(f) of
the Act, referred to as the ‘‘holdharmless’’ provision, provides that if an
individual is entitled to benefits under
section 202 or 223 of the Act (the OldAge and Survivors Insurance Benefit
and the Disability Insurance Benefit,
respectively) and has the Part B
premiums deducted from these benefit
payments, the premium increase will be
reduced, if necessary, to avoid causing
a decrease in the individual’s net
monthly payment. This decrease in
payment occurs if the increase in the
individual’s social security benefit due
to the cost-of-living adjustment under
section 215(i) of the Act is less than the
increase in the premium. Specifically,
the reduction in the premium amount
applies if the individual is entitled to
benefits under section 202 or 223 of the
Act for November and December of a
particular year and the individual’s Part
B premiums for December and the
following January are deducted from the
respective month’s section 202 or 223
benefits. The ‘‘hold-harmless’’ provision
does not apply to beneficiaries who are
required to pay an income-related
monthly adjustment amount.
A check for benefits under section 202
or 223 of the Act is received in the
month following the month for which
the benefits are due. The Part B
premium that is deducted from a
particular check is the Part B payment
for the month in which the check is
received. Therefore, a benefit check for
November is not received until
December but has December’s Part B
premium deducted from it.
Generally, if a beneficiary qualifies for
hold-harmless protection, that is, if the
beneficiary was in current payment
status for November and December of
the previous year, the reduced premium
for the individual for that January and
for each of the succeeding 11 months for
which he or she is entitled to benefits,
under section 202 or 203 of the Act, is
the greater of the following—
• The monthly premium for January
reduced as necessary to make the
December monthly benefits, after the
deduction of the Part B premium for
January, at least equal to the preceding
November’s monthly benefits, after the
deduction of the Part B premium for
December; or
• The monthly premium for that
individual for that December.
• In determining the premium
limitations under section 1839(f) of the
Act, the monthly benefits to which an
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individual is entitled under section 202
or 223 of the Act do not include
retroactive adjustments or payments and
deductions on account of work. Also,
once the monthly premium amount is
established under section 1839(f) of the
Act, it will not be changed during the
year even if there are retroactive
adjustments or payments and
deductions on account of work that
apply to the individual’s monthly
benefits.
• Individuals who have enrolled in
Part B late or who have re-enrolled after
the termination of a coverage period are
subject to an increased premium under
section 1839(b) of the Act. The increase
is a percentage of the premium and is
based on the new premium rate before
any reductions under section 1839(f) of
the Act are made.
II. Provisions of the Notice
A. Notice of Medicare Part B Monthly
Actuarial Rates, Monthly Premium
Rates, and Annual Deductible
The Medicare Part B monthly
actuarial rates applicable for 2009 are
$192.70 for enrollees age 65 and over
and $224.20 for disabled enrollees
under age 65. Section II.B. of this notice
below, presents the actuarial
assumptions and bases from which
these rates are derived. The Part B
standard monthly premium rate for
2009 is $96.40. The Part B annual
deductible for 2009 is $135.00. Listed
below are the 2009 Part B monthly
premium rates to be paid by
beneficiaries who file an individual tax
return (including those who are single,
head of household, qualifying
widow(er) with dependent child, or
married filing separately who lived
apart from their spouse for the entire
taxable year), or a joint tax return.
Income-related
monthly adjustment
amount
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with
income:
Less than or equal to $85,000 .....................................
Greater than $85,000 and less than or equal to
$107,000.
Greater than $107,000 and less than or equal to
$160,000.
Greater than $160,000 and less than or equal to
$213,000.
Greater than $213,000 .................................................
Less than or equal to $170,000 ...................................
Greater than $170,000 and less than or equal to
$214,000.
Greater than $214,000 and less than or equal to
$320,000.
Greater than $320,000 and less than or equal to
$426,000.
Greater than $426,000 .................................................
In addition, the monthly premium
rates to be paid by beneficiaries who are
married and lived with their spouse at
any time during the taxable year, but file
Less than or equal to $85,000 ................................................................................................................................
Greater than $85,000 and less than or equal to $128,000 .....................................................................................
Greater than $128,000 ............................................................................................................................................
B. Statement of Actuarial Assumptions
and Bases Employed in Determining the
Monthly Actuarial Rates and the
Monthly Premium Rate for Part B
Beginning January 2009
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1. Actuarial Status of the Part B Account
in the Supplementary Medical
Insurance Trust Fund
Under the statute, the starting point
for determining the standard monthly
premium is the amount that would be
necessary to finance Part B on an
incurred basis. This is the amount of
income that would be sufficient to pay
for services furnished during that year
(including associated administrative
costs) even though payment for some of
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these services will not be made until
after the close of the year. The portion
of income required to cover benefits not
paid until after the close of the year is
added to the trust fund and used when
needed.
The premium rates are established
prospectively and are, therefore, subject
to projection error. Additionally,
legislation enacted after the financing
was established, but effective for the
period in which the financing is set,
may affect program costs. As a result,
the income to the program may not
equal incurred costs. Therefore, trust
fund assets must be maintained at a
level that is adequate to cover an
appropriate degree of variation between
actual and projected costs, and the
amount of incurred, but unpaid,
expenses. Numerous factors determine
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Total monthly
premium
amount
$0.00
38.50
$96.40
134.90
96.30
192.70
154.10
250.50
211.90
308.30
a separate tax return from their spouse,
are listed below.
Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax
return from their spouse:
The Part B annual deductible for 2009
is $ 135.00 for all beneficiaries.
55091
Income-related
monthly adjustment
amount
$0.00
154.10
211.90
Total monthly
premium
amount
$96.40
250.50
308.30
what level of assets is appropriate to
cover variation between actual and
projected costs. The three most
important of these factors are: (1) The
difference from prior years between the
actual performance of the program and
estimates made at the time financing
was established; (2) the likelihood and
potential magnitude of expenditure
changes resulting from enactment of
legislation affecting Part B costs in a
year subsequent to the establishment of
financing for that year, and (3) the
expected relationship between incurred
and cash expenditures. These factors are
analyzed on an ongoing basis, as the
trends can vary over time.
Table 1 summarizes the estimated
actuarial status of the trust fund as of
the end of the financing period for 2007
and 2008.
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TABLE 1—ESTIMATED ACTUARIAL STATUS OF THE PART B ACCOUNT IN THE SUPPLEMENTARY MEDICAL INSURANCE TRUST
FUND AS OF THE END OF THE FINANCING PERIOD
Assets
(millions)
Financing period ending
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Dec. 31, 2007 ..............................................................................................................................
Dec. 31, 2008 ..............................................................................................................................
2. Monthly Actuarial Rate for Enrollees
Age 65 and Older
The monthly actuarial rate for
enrollees age 65 and older is one-half of
the sum of monthly amounts for: (1) The
projected cost of benefits; and (2)
administrative expenses for each
enrollee age 65 and older, after
adjustments to this sum to allow for
interest earnings on assets in the trust
fund and an adequate contingency
margin. The contingency margin is an
amount appropriate to provide for
possible variation between actual and
projected costs and to amortize any
surplus assets or unfunded liabilities.
The monthly actuarial rate for
enrollees age 65 and older for 2009 is
determined by first establishing perenrollee cost by type of service from
program data through 2007 and then
projecting these costs for subsequent
years. The projection factors used for
financing periods from January 1, 2006
through December 31, 2009 are shown
in Table 2.
As indicated in Table 3, the projected
monthly rate required to pay for onehalf of the total of benefits and
administrative costs for enrollees age 65
and over for 2009 is $198.47. Based on
current estimates, the assets are
somewhat more than sufficient to cover
the amount of incurred, but unpaid,
expenses and to provide for a significant
degree of variation between actual and
projected costs. Thus, a negative
contingency margin can be included to
decrease assets to a slightly lower but
still adequate level, relative to
expenditures. The monthly actuarial
rate of $192.70 provides an adjustment
of ¥$3.14 for a contingency margin and
¥$2.63 for interest earnings.
The size of the contingency margin for
2009 is affected by several factors. The
assets in the Part B account in the
Supplementary Medical Insurance Trust
Fund were below the level considered
adequate for the four years, 2003–2006.
Consequently, Part B premiums and
general revenue financing in recent
years have been set at somewhat higher
levels than would otherwise have been
required in order to restore the
contingency reserve to an appropriate
level. The projected assets in the Part B
account in the Supplementary Medical
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Insurance Trust Fund are now
somewhat above the level considered
adequate by the end of 2008 as a result
of: (1) The planned increases in the
contingency margins built into the Part
B financing for several years, including
2008, in order to increase these assets;
and (2) a $9.3 billion restoration of the
Part B account assets for certain Part A
hospice benefits that were inadvertently
drawn from the Part B account.
The formula specified in current law
will result in a reduction in physician
fees of approximately 20 percent in
2010 and is projected to cause
additional reductions in subsequent
years. For each year from 2003 through
2009, Congress has acted to prevent
physician fee reductions from occurring.
In recognition of the strong possibility
of increases in Part B expenditures that
would result from similar legislation to
override the decreases in physician fees
in 2010 or later years, it is appropriate
to maintain a somewhat larger Part B
contingency reserve than would
otherwise be necessary. The asset level
projected for the end of 2009 is adequate
to temporarily accommodate this
contingency. Such legislation, however,
would raise the future cost of Part B
compared to current law and would
necessitate additional increases in the
premium and general revenue financing
after 2009.
The traditional goal for the Part B
reserve has been that assets minus
liabilities at the end of a year should
represent between 15 and 20 percent of
the following year’s total incurred
expenditures. Within this range, 17
percent has been the normal target. In
view of the strong likelihood of actual
expenditures exceeding estimated
levels, due to the enactment of
legislation after the financing has been
set for a given year, a contingency
reserve ratio in excess of 20 percent of
the following year’s expenditures would
better ensure that the assets of the Part
B account can adequately cover the cost
of incurred-but-not-reported benefits
together with variations between actual
and estimated cost levels.
The actuarial rate of $192.70 per
month for aged beneficiaries, as
announced in this notice for 2009,
reflects the combined net effect of the
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$51,358
59,088
Liabilities
(millions)
12,773
12,269
Assets less
liabilities
(millions)
$38,585
46,819
factors described above and the
projection assumptions listed in Table
2.
3. Monthly Actuarial Rate for Disabled
Enrollees
Disabled enrollees are those persons
under age 65 who are enrolled in Part
B because of entitlement to Social
Security disability benefits for more
than 24 months or because of
entitlement to Medicare under the endstage renal disease (ESRD) program.
Projected monthly costs for disabled
enrollees (other than those with ESRD)
are prepared in a fashion parallel to the
projection for the aged using
appropriate actuarial assumptions (see
Table 2). Costs for the ESRD program are
projected differently because of the
different nature of services offered by
the program.
As shown in Table 4, the projected
monthly rate required to pay for onehalf of the total of benefits and
administrative costs for disabled
enrollees for 2009 is $230.36. The
monthly actuarial rate of $224.20 also
provides an adjustment of ¥$6.17 for
interest earnings and $0.01 for a
contingency margin, reflecting the same
factors described above for the aged
actuarial rate. Based on current
estimates, the assets associated with the
disabled Medicare beneficiaries are
sufficient to cover the amount of
incurred, but unpaid, expenses and to
provide for a significant degree of
variation between actual and projected
costs. Thus, a near-zero contingency
margin is sufficient to maintain assets at
an appropriate level.
The actuarial rate of $224.20 per
month for disabled beneficiaries, as
announced in this notice for 2009,
reflects the combined net effect of the
factors described above for aged
beneficiaries and the projection
assumptions listed in Table 2.
4. Sensitivity Testing
Several factors contribute to
uncertainty about future trends in
medical care costs. It is appropriate to
test the adequacy of the rates using
alternative assumptions. The results of
those assumptions are shown in Table 5.
One set represents increases that are
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lower and, therefore, more optimistic
than the current estimate. The other set
represents increases that are higher and,
therefore, more pessimistic than the
current estimate. The values for the
alternative assumptions were
determined from a statistical analysis of
the historical variation in the respective
increase factors.
As indicated in Table 5, the monthly
actuarial rates would result in an excess
of assets over liabilities of $45,882
million by the end of December 2009
under the assumptions used in
preparing this report. This amounts to
23.1 percent of the estimated total
incurred expenditures for the following
year.
Assumptions that are somewhat more
pessimistic (and that therefore test the
adequacy of the assets to accommodate
projection errors) produce a surplus of
$25,400 million by the end of December
2009, which amounts to 11.5 percent of
the estimated total incurred
expenditures for the following year.
Under fairly optimistic assumptions, the
monthly actuarial rates would result in
a surplus of $66,697 million by the end
of December 2009, or 37.4 percent of the
estimated total incurred expenditures
for the following year.
The above analysis indicates that the
premium and general revenue financing
established for 2009, together with
existing Part B account assets would be
adequate to cover estimated Part B costs
for 2009 under current law, even if
actual costs prove to be somewhat
greater than expected.
5. Premium Rates and Deductible
As determined in accordance with
section 1839 of the Act, listed below are
the 2009 Part B monthly premium rates
to be paid by beneficiaries who file an
individual tax return (including those
who are single, head of household,
qualifying widow(er) with dependent
child, or married filing separately who
lived apart from their spouse for the
entire taxable year), or a joint tax return.
Beneficiaries who file an individual tax return with
income:
Beneficiaries who file a joint tax return with income:
Less than or equal to $85,000 .....................................
Greater than $85,000 and less than or equal to
$107,000.
Greater than $107,000 and less than or equal to
$160,000.
Greater than $160,000 and less than or equal to
$213,000.
Greater than $213,000 .................................................
Income-related
monthly adjustment
amount
Total monthly
premium
amount
$0.00
38.50
$96.40
134.90
96.30
192.70
154.10
250.50
211.90
308.30
Less than or equal to $170,000 ...................................
Greater than $170,000 and less than or equal to
$214,000.
Greater than $214,000 and less than or equal to
$320,000.
Greater than $320,000 and less than or equal to
$426,000.
Greater than $426,000 .................................................
In addition, the monthly premium
rates to be paid by beneficiaries who are
married and lived with their spouse at
any time during the taxable year, but file
a separate tax return from their spouse,
are listed below.
Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax
return from their spouse:
Income-related
monthly adjustment
amount
Total monthly
premium
amount
$0.00
154.10
211.90
$96.40
250.50
308.30
Less than or equal to $85,000 ................................................................................................................................
Greater than $85,000 and less than or equal to $128,000 .....................................................................................
Greater than $128,000 ............................................................................................................................................
TABLE 2—PROJECTION FACTORS 1 12-MONTH PERIODS ENDING DECEMBER 31 OF 2006–2009
[In percent]
Physicians’ services
Residual 3
Durable
medical
equipment
Calendar year
Fees 2
Aged:
2006
2007
2008
2009
Disabled:
2006
2007
2008
2009
Carrier
lab 4
Other carrier services 5
Outpatient
hospital
Home
health
agency
Other
intermediary
services 7
Managed
care
...............................
...............................
...............................
...............................
0.2
¥1.4
0.4
2.3
4.2
3.9
2.9
3.0
4.7
3.1
4.9
3.5
7.2
8.1
6.3
8.9
5.1
5.0
6.4
9.8
4.3
8.4
5.6
5.7
17.3
21.7
10.7
5.7
3.9
3.9
4.3
6.2
6.4
8.4
7.0
5.6
12.5
3.4
4.8
5.3
...............................
...............................
...............................
...............................
0.2
¥1.4
0.4
2.3
2.8
3.1
3.2
3.4
6.6
3.3
6.5
4.2
8.7
15.3
8.6
9.2
¥3.3
5.7
9.8
10.1
4.5
8.2
7.2
6.0
19.5
20.2
11.4
6.4
5.5
6.2
5.8
6.5
14.1
13.6
8.2
6.0
18.7
8.7
6.0
7.8
1 All
values for services other than managed care are per fee-for-service enrollee. Managed care values are per managed care enrollee.
recognized for payment under the program.
in the number of services received per enrollee and greater relative use of more expensive services.
4 Includes services paid under the lab fee schedule furnished in the physician’s office or an independent lab.
5 Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services, parenteral and enteral drug costs, supplies, etc.
6 Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
7 Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health centers, rehabilitation and psychiatric hospitals, etc.
2 As
3 Increase
jlentini on PROD1PC65 with NOTICES
Hospital
lab 6
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TABLE 3—DERIVATION OF MONTHLY ACTUARIAL RATE FOR ENROLLEES AGE 65 AND OVER FOR FINANCING PERIODS
ENDING DECEMBER 31, 2006 THROUGH DECEMBER 31, 2009
Financing periods
CY 2006
Covered services (at level recognized):
Physician fee schedule .............................................................................
Durable medical equipment ......................................................................
Carrier lab 1 ...............................................................................................
Other carrier services 2 .............................................................................
Outpatient hospital ....................................................................................
Home health .............................................................................................
Hospital lab 3 .............................................................................................
Other intermediary services 4 ...................................................................
Managed care ...........................................................................................
CY 2007
CY 2008
CY 2009
79.95
9.77
3.75
19.61
28.50
8.62
2.82
12.75
34.84
78.54
9.66
3.89
19.75
29.61
10.06
2.81
13.25
42.41
77.77
9.70
3.96
20.13
29.96
10.66
2.81
13.59
51.04
80.19
9.82
4.22
21.62
30.98
11.03
2.92
14.03
57.15
Total services ....................................................................................
Cost sharing:
Deductible .................................................................................................
Coinsurance ..............................................................................................
200.61
209.97
219.62
231.96
¥5.05
¥31.18
¥5.33
¥30.73
¥5.50
¥30.49
¥5.50
¥31.18
Total benefits .....................................................................................
Administrative expenses ..................................................................................
164.39
7.89
173.91
5.69
183.63
3.28
195.28
3.20
Incurred expenditures ......................................................................................
Value of interest ...............................................................................................
Contingency margin for projection error and to amortize the surplus or deficit .................................................................................................................
172.28
¥1.52
179.60
¥1.98
186.91
¥2.48
198.47
¥2.63
6.14
9.38
8.27
¥3.14
Monthly actuarial rate ........................................................................
176.90
187.00
192.70
192.70
1 Includes
2 Includes
services paid under the lab fee schedule furnished in the physician’s office or an independent lab.
physician-administered drugs, ambulatory surgical center facility costs, ambulance services, parenteral and enteral drug costs, sup-
plies, etc.
3 Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
4 Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health centers, and rehabilitation and psychiatric hospitals, etc.
TABLE 4—DERIVATION OF MONTHLY ACTUARIAL RATE FOR DISABLED ENROLLEES FOR FINANCING PERIODS ENDING
DECEMBER 31, 2006 THROUGH DECEMBER 31, 2009
Financing periods
CY 2006
Covered services (at level recognized):
Physician fee schedule .............................................................................
Durable medical equipment ......................................................................
Carrier lab 1 ...............................................................................................
Other carrier services 2 .............................................................................
Outpatient hospital ....................................................................................
Home health .............................................................................................
Hospital lab 3 .............................................................................................
Other intermediary services 4 ...................................................................
Managed care ...........................................................................................
CY 2007
CY 2008
CY 2009
79.80
16.91
4.62
22.47
38.16
7.07
4.27
39.91
23.30
79.03
17.10
5.13
23.26
40.05
8.29
4.42
41.08
30.30
80.09
17.80
5.43
24.94
41.81
9.03
4.56
42.30
36.77
83.67
18.33
5.86
27.13
43.81
9.49
4.80
43.45
41.98
236.52
248.66
262.74
278.52
¥4.71
¥44.03
¥4.86
¥44.19
¥5.14
¥44.89
¥5.15
¥46.45
Total benefits .....................................................................................
Administrative expenses ..................................................................................
187.79
4.96
199.61
3.88
212.70
3.55
226.92
3.44
Incurred expenditures ......................................................................................
Value of interest ...............................................................................................
Contingency margin for projection error and to amortize the surplus or deficit .................................................................................................................
jlentini on PROD1PC65 with NOTICES
Total services ....................................................................................
Cost sharing:
Deductible .................................................................................................
Coinsurance ..............................................................................................
192.75
¥3.49
203.49
¥3.40
216.25
¥3.61
230.36
¥6.17
14.44
¥2.79
¥2.94
0.01
Monthly actuarial rate ........................................................................
203.70
197.30
209.70
224.20
1 Includes
2 Includes
services paid under the lab fee schedule furnished in the physician’s office or an independent lab.
physician-administered drugs, ambulatory surgical center facility costs, ambulance services, parenteral and enteral drug costs, sup-
plies, etc.
3 Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
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55095
4 Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health centers, rehabilitation and psychiatric hospitals,
etc.
TABLE 5—ACTUARIAL STATUS OF THE PART B ACCOUNT IN THE SMI TRUST FUND UNDER THREE SETS OF ASSUMPTIONS
FOR FINANCING PERIODS THROUGH DECEMBER 31, 2009
As of December 31,
CY 2007
This projection:
Actuarial status (in millions):
Assets .............................................................................................................................
Liabilities .........................................................................................................................
Assets less liabilities .......................................................................................................
Ratio (in percent) 1 ..........................................................................................................
Low cost projection:
Actuarial status (in millions):
Assets .............................................................................................................................
Liabilities .........................................................................................................................
Assets less liabilities .......................................................................................................
Ratio (in percent) 1 ..........................................................................................................
High cost projection:
Actuarial status (in millions):
Assets .............................................................................................................................
Liabilities .........................................................................................................................
Assets less liabilities .......................................................................................................
Ratio (in percent) 1 ..........................................................................................................
1 Ratio
CY 2009
51,358
12,773
59,088
12,269
58,618
12,736
38,585
20.2
46,819
22.7
45,882
23.1
51,358
12,773
65,860
11,517
78,759
12,061
38,585
21.0
54,343
28.3
66,697
37.4
51,358
12,773
52,592
12,991
38,854
13,453
38,585
19.5
39,601
17.9
25,400
11.5
of assets less liabilities at the end of the year to the total incurred expenditures during the following year, expressed as a percent.
III. Regulatory Impact Analysis
jlentini on PROD1PC65 with NOTICES
CY 2008
We have examined the impacts of this
notice as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993, as further
amended), the Regulatory Flexibility
Act (RFA) (September 19, 1980, Pub. L.
96–354), section 1102(b) of the Social
Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995
(Pub. L. 104–4), Executive Order 13132
on Federalism (August 4, 1999), and the
Congressional Review Act (5 U.S.C.
804(2)).
Executive Order 12866 (as amended
by Executive Order 13258) directs
agencies to assess all costs and benefits
of available regulatory alternatives and,
if regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity). A regulatory impact
analysis (RIA) must be prepared for
major rules with economically
significant effects ($100 million or more
in any one year).
We have examined the impact of this
notice as required by Executive Order
12866 (September 1993, Regulatory
Planning and Review) and the
Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96–354).
Executive Order 12866 directs agencies
to assess all costs and benefits of
available regulatory alternatives and, if
regulation is necessary, to select
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19:36 Sep 23, 2008
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regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity).
The RFA requires agencies to analyze
options for regulatory relief of small
businesses. For purposes of the RFA,
small entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of $6.5 million to $31.5 million in any
one year. Individuals and States are not
included in the definition of a small
entity. This notice will not have a
significant impact on a substantial
number of small businesses or other
small entities. Therefore, the Secretary
has determined that this notice will not
have a significant economic impact on
a substantial number of small entities.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a Metropolitan Statistical Area and has
fewer than 100 beds. We have
determined that this notice will not
have a significant effect on a substantial
number of small entities or on the
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Fmt 4703
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operations of a substantial number of
small rural hospitals. Therefore, we are
not preparing analyses for either the
RFA or section 1102(b) of the Act.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2008, that
threshold is approximately $130
million. This notice has no
consequential effect on State, local, or
tribal governments. We believe the
private sector costs of this notice fall
below this threshold as well.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it publishes a proposed
rule (and subsequent final rule) that
imposes substantial direct compliance
costs on State and local governments,
preempts State law, or otherwise has
Federalism implications. We have
determined that this notice does not
significantly affect the rights, roles, and
responsibilities of States.
This notice announces that the
monthly actuarial rates applicable for
2009 are $192.70 for enrollees age 65
and over and $224.20 for disabled
enrollees under age 65. It also
E:\FR\FM\24SEN1.SGM
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55096
Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices
announces the 2009 monthly Part B
premium rates to be paid by
beneficiaries who file an individual tax
return (including those who are single,
head of household, qualifying
widow(er) with a dependent child, or
married filing separately who lived
apart from their spouse for the entire
taxable year), or a joint tax return.
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Less than or equal to $85,000 .....................................
Greater than $85,000 and less than or equal to
$107,000.
Greater than $107,000 and less than or equal to
$160,000.
Greater than $160,000 and less than or equal to
$213,000.
Greater than $213,000 .................................................
Income-related
monthly adjustment
amount
Total monthly
premium
amount
$0.00
38.50
$96.40
134.90
96.30
192.70
154.10
250.50
211.90
308.30
Less than or equal to $170,000 ...................................
Greater than $170,000 and less than or equal to
$214,000.
Greater than $214,000 and less than or equal to
$320,000.
Greater than $320,000 and less than or equal to
$426,000.
Greater than $426,000 .................................................
In addition, the monthly premium
rates to be paid by beneficiaries who are
married and lived with their spouse at
any time during the taxable year, but file
a separate tax return from their spouse,
are also announced and listed below.
Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax
return from their spouse:
Income-related
monthly adjustment
amount
Total monthly
premium
amount
$0.00
154.10
211.90
$96.40
250.50
308.30
Less than or equal to $85,000 ................................................................................................................................
Greater than $85,000 and less than or equal to $128,000 .....................................................................................
Greater than $128,000 ............................................................................................................................................
jlentini on PROD1PC65 with NOTICES
The Part B deductible for calendar
year 2009 is $135.00. The standard Part
B premium rate of $96.40 is the same as
the premium rate for 2008, so there will
be no additional costs to the
approximately 42.3 million Part B
enrollees for 2009. The monthly impact
on the beneficiaries who are required to
pay a higher premium for 2009 because
their incomes exceed specified
thresholds is $38.50, $96.30, $154.10, or
$211.90, which is in addition to the
standard monthly premium. These
amounts are higher than the 2008
amounts of $25.80, $64.50, $103.30, and
$142.00, respectively, which results in
$770 million in additional costs to the
approximately 1.7 million Part B
enrollees who are affected. Therefore,
this notice is a major rule as defined in
5 U.S.C. 804(2) and is an economically
significant rule under Executive Order
12866.
In accordance with the provisions of
Executive Order 12866, this notice was
reviewed by the Office of Management
and Budget.
IV. Waiver of Proposed Notice
The Medicare statute requires the
publication of the monthly actuarial
rates and the Part B premium amounts
in September. We ordinarily use general
notices, rather than notice and comment
rulemaking procedures, to make such
announcements. In doing so, we note
that, under the Administrative
Procedure Act, interpretive rules,
general statements of policy, and rules
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17:26 Sep 23, 2008
Jkt 214001
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, for 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 formulas used
to calculate the Part B premiums are
statutorily directed, and we can exercise
no discretion in applying those
formulas. Moreover, the statute
establishes the time period for which
the premium rates will apply, and
delaying publication of the Part B
premium rate such that it would not be
published before that time would be
contrary to the public interest.
Therefore, we find good cause to waive
publication of a proposed notice and
solicitation of public comments.
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
PO 00000
Frm 00076
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Dated: September 12, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Michael O. Leavitt,
Secretary.
[FR Doc. E8–22314 Filed 9–19–08; 9:00 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
[CMS–8035–N]
RIN 0938–AP04
Medicare Program; Part A Premium for
Calendar Year 2009 for the Uninsured
Aged and for Certain Disabled
Individuals Who Have Exhausted Other
Entitlement
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Notice.
AGENCY:
SUMMARY: This annual notice announces
Medicare’s Hospital Insurance (Part A)
premium for uninsured enrollees in
calendar year (CY) 2009. This premium
is to be paid by enrollees age 65 and
over who are not otherwise eligible for
benefits under Medicare Part A
(hereafter known as the ‘‘uninsured
aged’’) and by certain disabled
individuals who have exhausted other
E:\FR\FM\24SEN1.SGM
24SEN1
]]>Agencies
[Federal Register Volume 73, Number 186 (Wednesday, September 24, 2008)]
[Notices]
[Pages 55089-55096]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-22314]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8036-N]
RIN 0938-APOO
Medicare Program; Medicare Part B Monthly Actuarial Rates,
Premium Rate, and Annual Deductible Beginning January 1, 2009
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice announces the monthly actuarial rates for aged
(age 65 and over) and disabled (under age 65) beneficiaries enrolled in
Part B of the Medicare Supplementary Medical Insurance (SMI) program
beginning January 1, 2009. In addition, this notice announces the
monthly premium for aged and disabled beneficiaries as well as the
income-related monthly adjustment amounts to be paid by beneficiaries
with modified adjusted gross income above certain threshold amounts.
The monthly actuarial rates for 2009 are $192.70 for aged enrollees and
$224.20 for disabled enrollees. The standard monthly Part B premium
rate for 2009 is $96.40, which is equal to 50 percent of the monthly
actuarial rate for aged enrollees or approximately 25 percent of the
expected average total cost of Part B coverage for aged enrollees. (The
2008 standard premium rate was also $96.40.) The Part B deductible for
2009 is $135.00 for all Part B beneficiaries. If a beneficiary has to
pay an income-related monthly adjustment, they may have to pay a total
monthly premium of about 35, 50, 65, or 80 percent of the total cost of
Part B coverage.
DATES: Effective Date: January 1, 2009.
FOR FURTHER INFORMATION CONTACT: M. Kent Clemens, (410) 786-6391.
SUPPLEMENTARY INFORMATION:
I. Background
Part B is the voluntary portion of the Medicare program that pays
all or part of the costs for physicians' services, outpatient hospital
services, certain home health services, services furnished by rural
health clinics, ambulatory surgical centers, comprehensive outpatient
rehabilitation facilities, and certain other medical and health
services not covered by Medicare Part A, Hospital Insurance. Medicare
Part B is available to individuals who are entitled to Medicare Part A,
as well as to U.S. residents who have attained age 65 and are citizens,
and aliens who were lawfully admitted for permanent residence and have
resided in the United States for 5 consecutive years. Part B requires
enrollment and payment of monthly premiums, as provided for in 42 CFR
part 407, subpart B, and part 408, respectively. The difference between
the premiums paid by all enrollees and total incurred costs is met by
payments from the Supplementary Medical Insurance Fund.
The Secretary of the Department of Health and Human Services (the
Secretary) is required by section 1839 of the Social Security Act (the
Act) to announce the Part B monthly actuarial rates for aged and
disabled beneficiaries as well as the monthly Part B premium. The Part
B annual deductible is included because its determination is directly
linked to the aged actuarial rate.
The monthly actuarial rates for aged and disabled enrollees are
used to determine the correct amount of general revenue financing per
beneficiary each month. These amounts, according to actuarial
estimates, will equal, respectively, one-half the expected average
monthly cost of Part B for each aged enrollee (age 65 or over) and one-
half the expected average monthly cost of Part B for each disabled
enrollee (under age 65).
The Part B deductible to be paid by enrollees is also announced.
Prior to the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (MMA) (Pub. L. 108-173), the Part B deductible was set in
statute. After setting the 2005 deductible amount at $110.00, section
629 of the MMA (amending section 1833(b) of the Act) requires that the
Part B deductible be indexed beginning in 2006. The inflation factor to
be used each year is the annual percentage increase in the Part B
actuarial rate for enrollees age 65 and over. Specifically, the 2009
Part B deductible is calculated by multiplying the 2008 deductible by
the ratio of the 2009 aged actuarial rate over the 2008 aged actuarial
rate. The amount determined under this formula is then rounded to the
nearest $1.
The monthly Part B premium rate to be paid by aged and disabled
enrollees is also announced. (Although the costs to the program per
disabled enrollee are different than for the aged, the statute provides
that they pay the same premium amount.) Beginning with the passage of
section 203 of the Social Security Amendments of 1972 (Pub. L. 92-603),
the premium rate, which was determined on a fiscal year basis, was
limited to the lesser of the actuarial rate for aged enrollees, or the
current monthly premium rate increased by the same percentage as the
most recent general increase in monthly Title II social security
benefits.
However, the passage of section 124 of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) (Pub. L. 97-248) suspended this
premium determination process. Section 124 of TEFRA changed the premium
basis to 50 percent of the monthly actuarial rate for aged enrollees
(that is, 25 percent of program costs for aged enrollees). Section 606
of the Social Security Amendments of 1983 (Pub. L. 98-21), section 2302
of the Deficit Reduction Act of 1984 (DEFRA 84) (Pub. L. 98-369),
section 9313 of the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA 85) (Pub. L. 99-272), section 4080 of the Omnibus Budget
Reconciliation Act of 1987 (OBRA 87) (Pub. L. 100-203), and section
6301 of the Omnibus Budget Reconciliation Act of 1989 (OBRA 89) (Pub.
L. 101-239) extended the provision that the premium be based on 50
percent of the monthly actuarial rate for aged enrollees (that is, 25
percent of program costs for aged enrollees). This extension expired at
the end of 1990.
The premium rate for 1991 through 1995 was legislated by section
1839(e)(1)(B) of the Act, as added by section 4301 of the Omnibus
Budget Reconciliation Act of 1990 (OBRA 90) (Pub. L. 101-508). In
January 1996, the premium determination basis would have reverted to
the method established by the 1972 Social Security Act Amendments.
However, section 13571
[[Page 55090]]
of the Omnibus Budget Reconciliation Act of 1993 (OBRA 93) (Pub. L.
103-66) changed the premium basis to 50 percent of the monthly
actuarial rate for aged enrollees (that is, 25 percent of program costs
for aged enrollees) for 1996 through 1998.
Section 4571 of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-
33) permanently extended the provision that the premium be based on 50
percent of the monthly actuarial rate for aged enrollees (that is, 25
percent of program costs for aged enrollees).
The BBA included a further provision affecting the calculation of
the Part B actuarial rates and premiums for 1998 through 2003. Section
4611 of the BBA modified the home health benefit payable under Part A
for individuals enrolled in Part B. Under this section, beginning in
1998, expenditures for home health services not considered ``post-
institutional'' are payable under Part B rather than Part A. However,
section 4611(e)(1) of the BBA required that there be a transition from
1998 through 2002 for the aggregate amount of the expenditures
transferred from Part A to Part B. Section 4611(e)(2) of the BBA also
provided a specific yearly proportion for the transferred funds. The
proportions were 1/6 for 1998, 1/3 for 1999, 1/2 for 2000, 2/3 for
2001, and 5/6 for 2002. For the purpose of determining the correct
amount of financing from general revenues of the Federal Government, it
was necessary to include only these transitional amounts in the monthly
actuarial rates for both aged and disabled enrollees, rather than the
total cost of the home health services being transferred.
Section 4611(e)(3) of the BBA also specified, for the purpose of
determining the premium, that the monthly actuarial rate for enrollees
age 65 and over be computed as though the transition would occur for
1998 through 2003 and that 1/7 of the cost be transferred in 1998, 2/7
in 1999, 3/7 in 2000, 4/7 in 2001, 5/7 in 2002, and 6/7 in 2003.
Therefore, the transition period for incorporating this home health
transfer into the premium was 7 years while the transition period for
including these services in the actuarial rate was 6 years.
Section 811 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Pub. L. 108-173, also known as the Medicare
Modernization Act, or MMA), which amended section 1839 of the Act,
requires that, starting on January 1, 2007, the Part B premium a
beneficiary pays each month be based on their annual income.
Specifically, if a beneficiary's ``modified adjusted gross income'' is
greater than the legislated threshold amounts (for 2009, $85,000 for a
beneficiary filing an individual income tax return, and $170,000 for a
beneficiary filing a joint tax return) the beneficiary is responsible
for a larger portion of the estimated total cost of Part B benefit
coverage. In addition to the standard 25 percent premium, these
beneficiaries will now have to pay an income-related monthly adjustment
amount. The MMA made no change to the actuarial rate calculation, and
the standard premium, which will continue to be paid by beneficiaries
whose modified adjusted gross income is below the applicable
thresholds, still represents 25 percent of the estimated total cost to
the program of Part B coverage for an aged enrollee. However, once the
adjustments are fully phased in, and depending on income and tax filing
status, a beneficiary could now be responsible for 35, 50, 65, or 80
percent of the estimated total cost of Part B coverage, rather than 25
percent. The end result of the higher premium is that the Part B
premium subsidy is reduced and less general revenue financing is
required for beneficiaries with higher income because they are paying a
larger share of the total cost with their premium. That is, the premium
subsidy will continue to be approximately 75 percent for beneficiaries
with income below the applicable income thresholds, but will be reduced
for beneficiaries with income above these thresholds. The MMA specified
that there be a 5-year transition to full implementation of this
provision. However, section 5111 of the Deficit Reduction Act of 2005
(Pub. L. 109-171) (DRA) modified the transition to a 3-year period.
Section 4732(c) of the BBA added section 1933(c) of the Act, which
required the Secretary to allocate money from the Part B trust fund to
the State Medicaid programs for the purpose of providing Medicare Part
B premium assistance from 1998 through 2002 for the low-income Medicaid
beneficiaries who qualify under section 1933 of the Act. This
allocation, while not a benefit expenditure, was an expenditure of the
trust fund and was included in calculating the Part B actuarial rates
through 2002. For 2003 through 2007, the expenditure was made from the
trust fund because the allocation was temporarily extended. However,
because the extension occurred after the financing was determined, the
allocation was not included in the calculation of the financing rates.
A further provision affecting the calculation of the Part B premium
is section 1839(f) of the Act, as amended by section 211 of the
Medicare Catastrophic Coverage Act of 1988 (MCCA 88) (Pub. L. 100-360).
(The Medicare Catastrophic Coverage Repeal Act of 1989 (Pub. L. 101-
234) did not repeal the revisions to section 1839(f) made by MCCA 88.)
Section 1839(f) of the Act, referred to as the ``hold-harmless''
provision, provides that if an individual is entitled to benefits under
section 202 or 223 of the Act (the Old-Age and Survivors Insurance
Benefit and the Disability Insurance Benefit, respectively) and has the
Part B premiums deducted from these benefit payments, the premium
increase will be reduced, if necessary, to avoid causing a decrease in
the individual's net monthly payment. This decrease in payment occurs
if the increase in the individual's social security benefit due to the
cost-of-living adjustment under section 215(i) of the Act is less than
the increase in the premium. Specifically, the reduction in the premium
amount applies if the individual is entitled to benefits under section
202 or 223 of the Act for November and December of a particular year
and the individual's Part B premiums for December and the following
January are deducted from the respective month's section 202 or 223
benefits. The ``hold-harmless'' provision does not apply to
beneficiaries who are required to pay an income-related monthly
adjustment amount.
A check for benefits under section 202 or 223 of the Act is
received in the month following the month for which the benefits are
due. The Part B premium that is deducted from a particular check is the
Part B payment for the month in which the check is received. Therefore,
a benefit check for November is not received until December but has
December's Part B premium deducted from it.
Generally, if a beneficiary qualifies for hold-harmless protection,
that is, if the beneficiary was in current payment status for November
and December of the previous year, the reduced premium for the
individual for that January and for each of the succeeding 11 months
for which he or she is entitled to benefits, under section 202 or 203
of the Act, is the greater of the following--
The monthly premium for January reduced as necessary to
make the December monthly benefits, after the deduction of the Part B
premium for January, at least equal to the preceding November's monthly
benefits, after the deduction of the Part B premium for December; or
The monthly premium for that individual for that December.
In determining the premium limitations under section
1839(f) of the Act, the monthly benefits to which an
[[Page 55091]]
individual is entitled under section 202 or 223 of the Act do not
include retroactive adjustments or payments and deductions on account
of work. Also, once the monthly premium amount is established under
section 1839(f) of the Act, it will not be changed during the year even
if there are retroactive adjustments or payments and deductions on
account of work that apply to the individual's monthly benefits.
Individuals who have enrolled in Part B late or who have
re-enrolled after the termination of a coverage period are subject to
an increased premium under section 1839(b) of the Act. The increase is
a percentage of the premium and is based on the new premium rate before
any reductions under section 1839(f) of the Act are made.
II. Provisions of the Notice
A. Notice of Medicare Part B Monthly Actuarial Rates, Monthly Premium
Rates, and Annual Deductible
The Medicare Part B monthly actuarial rates applicable for 2009 are
$192.70 for enrollees age 65 and over and $224.20 for disabled
enrollees under age 65. Section II.B. of this notice below, presents
the actuarial assumptions and bases from which these rates are derived.
The Part B standard monthly premium rate for 2009 is $96.40. The Part B
annual deductible for 2009 is $135.00. Listed below are the 2009 Part B
monthly premium rates to be paid by beneficiaries who file an
individual tax return (including those who are single, head of
household, qualifying widow(er) with dependent child, or married filing
separately who lived apart from their spouse for the entire taxable
year), or a joint tax return.
----------------------------------------------------------------------------------------------------------------
Income-related
Beneficiaries who file an individual tax Beneficiaries who file a joint monthly Total monthly
return with income: tax return with income: adjustment premium amount
amount
----------------------------------------------------------------------------------------------------------------
Less than or equal to $85,000................. Less than or equal to $170,000.. $0.00 $96.40
Greater than $85,000 and less than or equal to Greater than $170,000 and less 38.50 134.90
$107,000. than or equal to $214,000.
Greater than $107,000 and less than or equal Greater than $214,000 and less 96.30 192.70
to $160,000. than or equal to $320,000.
Greater than $160,000 and less than or equal Greater than $320,000 and less 154.10 250.50
to $213,000. than or equal to $426,000.
Greater than $213,000......................... Greater than $426,000........... 211.90 308.30
----------------------------------------------------------------------------------------------------------------
In addition, the monthly premium rates to be paid by beneficiaries
who are married and lived with their spouse at any time during the
taxable year, but file a separate tax return from their spouse, are
listed below.
------------------------------------------------------------------------
Income-related
Beneficiaries who are married and lived monthly
with their spouse at any time during the adjustment Total monthly
year, but file a separate tax return amount premium amount
from their spouse:
------------------------------------------------------------------------
Less than or equal to $85,000........... $0.00 $96.40
Greater than $85,000 and less than or 154.10 250.50
equal to $128,000......................
Greater than $128,000................... 211.90 308.30
------------------------------------------------------------------------
The Part B annual deductible for 2009 is $ 135.00 for all
beneficiaries.
B. Statement of Actuarial Assumptions and Bases Employed in Determining
the Monthly Actuarial Rates and the Monthly Premium Rate for Part B
Beginning January 2009
1. Actuarial Status of the Part B Account in the Supplementary Medical
Insurance Trust Fund
Under the statute, the starting point for determining the standard
monthly premium is the amount that would be necessary to finance Part B
on an incurred basis. This is the amount of income that would be
sufficient to pay for services furnished during that year (including
associated administrative costs) even though payment for some of these
services will not be made until after the close of the year. The
portion of income required to cover benefits not paid until after the
close of the year is added to the trust fund and used when needed.
The premium rates are established prospectively and are, therefore,
subject to projection error. Additionally, legislation enacted after
the financing was established, but effective for the period in which
the financing is set, may affect program costs. As a result, the income
to the program may not equal incurred costs. Therefore, trust fund
assets must be maintained at a level that is adequate to cover an
appropriate degree of variation between actual and projected costs, and
the amount of incurred, but unpaid, expenses. Numerous factors
determine what level of assets is appropriate to cover variation
between actual and projected costs. The three most important of these
factors are: (1) The difference from prior years between the actual
performance of the program and estimates made at the time financing was
established; (2) the likelihood and potential magnitude of expenditure
changes resulting from enactment of legislation affecting Part B costs
in a year subsequent to the establishment of financing for that year,
and (3) the expected relationship between incurred and cash
expenditures. These factors are analyzed on an ongoing basis, as the
trends can vary over time.
Table 1 summarizes the estimated actuarial status of the trust fund
as of the end of the financing period for 2007 and 2008.
[[Page 55092]]
Table 1--Estimated Actuarial Status of the Part B Account in the Supplementary Medical Insurance Trust Fund as
of the End of the Financing Period
----------------------------------------------------------------------------------------------------------------
Assets less
Financing period ending Assets Liabilities liabilities
(millions) (millions) (millions)
----------------------------------------------------------------------------------------------------------------
Dec. 31, 2007................................................... $51,358 12,773 $38,585
Dec. 31, 2008................................................... 59,088 12,269 46,819
----------------------------------------------------------------------------------------------------------------
2. Monthly Actuarial Rate for Enrollees Age 65 and Older
The monthly actuarial rate for enrollees age 65 and older is one-
half of the sum of monthly amounts for: (1) The projected cost of
benefits; and (2) administrative expenses for each enrollee age 65 and
older, after adjustments to this sum to allow for interest earnings on
assets in the trust fund and an adequate contingency margin. The
contingency margin is an amount appropriate to provide for possible
variation between actual and projected costs and to amortize any
surplus assets or unfunded liabilities.
The monthly actuarial rate for enrollees age 65 and older for 2009
is determined by first establishing per-enrollee cost by type of
service from program data through 2007 and then projecting these costs
for subsequent years. The projection factors used for financing periods
from January 1, 2006 through December 31, 2009 are shown in Table 2.
As indicated in Table 3, the projected monthly rate required to pay
for one-half of the total of benefits and administrative costs for
enrollees age 65 and over for 2009 is $198.47. Based on current
estimates, the assets are somewhat more than sufficient to cover the
amount of incurred, but unpaid, expenses and to provide for a
significant degree of variation between actual and projected costs.
Thus, a negative contingency margin can be included to decrease assets
to a slightly lower but still adequate level, relative to expenditures.
The monthly actuarial rate of $192.70 provides an adjustment of -$3.14
for a contingency margin and -$2.63 for interest earnings.
The size of the contingency margin for 2009 is affected by several
factors. The assets in the Part B account in the Supplementary Medical
Insurance Trust Fund were below the level considered adequate for the
four years, 2003-2006. Consequently, Part B premiums and general
revenue financing in recent years have been set at somewhat higher
levels than would otherwise have been required in order to restore the
contingency reserve to an appropriate level. The projected assets in
the Part B account in the Supplementary Medical Insurance Trust Fund
are now somewhat above the level considered adequate by the end of 2008
as a result of: (1) The planned increases in the contingency margins
built into the Part B financing for several years, including 2008, in
order to increase these assets; and (2) a $9.3 billion restoration of
the Part B account assets for certain Part A hospice benefits that were
inadvertently drawn from the Part B account.
The formula specified in current law will result in a reduction in
physician fees of approximately 20 percent in 2010 and is projected to
cause additional reductions in subsequent years. For each year from
2003 through 2009, Congress has acted to prevent physician fee
reductions from occurring. In recognition of the strong possibility of
increases in Part B expenditures that would result from similar
legislation to override the decreases in physician fees in 2010 or
later years, it is appropriate to maintain a somewhat larger Part B
contingency reserve than would otherwise be necessary. The asset level
projected for the end of 2009 is adequate to temporarily accommodate
this contingency. Such legislation, however, would raise the future
cost of Part B compared to current law and would necessitate additional
increases in the premium and general revenue financing after 2009.
The traditional goal for the Part B reserve has been that assets
minus liabilities at the end of a year should represent between 15 and
20 percent of the following year's total incurred expenditures. Within
this range, 17 percent has been the normal target. In view of the
strong likelihood of actual expenditures exceeding estimated levels,
due to the enactment of legislation after the financing has been set
for a given year, a contingency reserve ratio in excess of 20 percent
of the following year's expenditures would better ensure that the
assets of the Part B account can adequately cover the cost of incurred-
but-not-reported benefits together with variations between actual and
estimated cost levels.
The actuarial rate of $192.70 per month for aged beneficiaries, as
announced in this notice for 2009, reflects the combined net effect of
the factors described above and the projection assumptions listed in
Table 2.
3. Monthly Actuarial Rate for Disabled Enrollees
Disabled enrollees are those persons under age 65 who are enrolled
in Part B because of entitlement to Social Security disability benefits
for more than 24 months or because of entitlement to Medicare under the
end-stage renal disease (ESRD) program. Projected monthly costs for
disabled enrollees (other than those with ESRD) are prepared in a
fashion parallel to the projection for the aged using appropriate
actuarial assumptions (see Table 2). Costs for the ESRD program are
projected differently because of the different nature of services
offered by the program.
As shown in Table 4, the projected monthly rate required to pay for
one-half of the total of benefits and administrative costs for disabled
enrollees for 2009 is $230.36. The monthly actuarial rate of $224.20
also provides an adjustment of -$6.17 for interest earnings and $0.01
for a contingency margin, reflecting the same factors described above
for the aged actuarial rate. Based on current estimates, the assets
associated with the disabled Medicare beneficiaries are sufficient to
cover the amount of incurred, but unpaid, expenses and to provide for a
significant degree of variation between actual and projected costs.
Thus, a near-zero contingency margin is sufficient to maintain assets
at an appropriate level.
The actuarial rate of $224.20 per month for disabled beneficiaries,
as announced in this notice for 2009, reflects the combined net effect
of the factors described above for aged beneficiaries and the
projection assumptions listed in Table 2.
4. Sensitivity Testing
Several factors contribute to uncertainty about future trends in
medical care costs. It is appropriate to test the adequacy of the rates
using alternative assumptions. The results of those assumptions are
shown in Table 5. One set represents increases that are
[[Page 55093]]
lower and, therefore, more optimistic than the current estimate. The
other set represents increases that are higher and, therefore, more
pessimistic than the current estimate. The values for the alternative
assumptions were determined from a statistical analysis of the
historical variation in the respective increase factors.
As indicated in Table 5, the monthly actuarial rates would result
in an excess of assets over liabilities of $45,882 million by the end
of December 2009 under the assumptions used in preparing this report.
This amounts to 23.1 percent of the estimated total incurred
expenditures for the following year.
Assumptions that are somewhat more pessimistic (and that therefore
test the adequacy of the assets to accommodate projection errors)
produce a surplus of $25,400 million by the end of December 2009, which
amounts to 11.5 percent of the estimated total incurred expenditures
for the following year. Under fairly optimistic assumptions, the
monthly actuarial rates would result in a surplus of $66,697 million by
the end of December 2009, or 37.4 percent of the estimated total
incurred expenditures for the following year.
The above analysis indicates that the premium and general revenue
financing established for 2009, together with existing Part B account
assets would be adequate to cover estimated Part B costs for 2009 under
current law, even if actual costs prove to be somewhat greater than
expected.
5. Premium Rates and Deductible
As determined in accordance with section 1839 of the Act, listed
below are the 2009 Part B monthly premium rates to be paid by
beneficiaries who file an individual tax return (including those who
are single, head of household, qualifying widow(er) with dependent
child, or married filing separately who lived apart from their spouse
for the entire taxable year), or a joint tax return.
----------------------------------------------------------------------------------------------------------------
Income-related
Beneficiaries who file an individual tax Beneficiaries who file a joint monthly Total monthly
return with income: tax return with income: adjustment premium amount
amount
----------------------------------------------------------------------------------------------------------------
Less than or equal to $85,000................. Less than or equal to $170,000.. $0.00 $96.40
Greater than $85,000 and less than or equal to Greater than $170,000 and less 38.50 134.90
$107,000. than or equal to $214,000.
Greater than $107,000 and less than or equal Greater than $214,000 and less 96.30 192.70
to $160,000. than or equal to $320,000.
Greater than $160,000 and less than or equal Greater than $320,000 and less 154.10 250.50
to $213,000. than or equal to $426,000.
Greater than $213,000......................... Greater than $426,000........... 211.90 308.30
----------------------------------------------------------------------------------------------------------------
In addition, the monthly premium rates to be paid by beneficiaries
who are married and lived with their spouse at any time during the
taxable year, but file a separate tax return from their spouse, are
listed below.
------------------------------------------------------------------------
Beneficiaries who are married and lived Income-related
with their spouse at any time during the monthly Total monthly
year, but file a separate tax return adjustment premium amount
from their spouse: amount
------------------------------------------------------------------------
Less than or equal to $85,000........... $0.00 $96.40
Greater than $85,000 and less than or 154.10 250.50
equal to $128,000......................
Greater than $128,000................... 211.90 308.30
------------------------------------------------------------------------
Table 2--Projection Factors \1\ 12-Month Periods Ending December 31 of 2006-2009
[In percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Physicians' services Other
------------------------ Durable Carrier carrier Outpatient Home Hospital Other Managed
Calendar year Residual medical lab \4\ services hospital health lab \6\ intermediary care
Fees \2\ \3\ equipment \5\ agency services \7\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aged:
2006...................... 0.2 4.2 4.7 7.2 5.1 4.3 17.3 3.9 6.4 12.5
2007...................... -1.4 3.9 3.1 8.1 5.0 8.4 21.7 3.9 8.4 3.4
2008...................... 0.4 2.9 4.9 6.3 6.4 5.6 10.7 4.3 7.0 4.8
2009...................... 2.3 3.0 3.5 8.9 9.8 5.7 5.7 6.2 5.6 5.3
Disabled:
2006...................... 0.2 2.8 6.6 8.7 -3.3 4.5 19.5 5.5 14.1 18.7
2007...................... -1.4 3.1 3.3 15.3 5.7 8.2 20.2 6.2 13.6 8.7
2008...................... 0.4 3.2 6.5 8.6 9.8 7.2 11.4 5.8 8.2 6.0
2009...................... 2.3 3.4 4.2 9.2 10.1 6.0 6.4 6.5 6.0 7.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All values for services other than managed care are per fee-for-service enrollee. Managed care values are per managed care enrollee.
\2\ As recognized for payment under the program.
\3\ Increase in the number of services received per enrollee and greater relative use of more expensive services.
\4\ Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab.
\5\ Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services, parenteral and enteral drug costs, supplies,
etc.
\6\ Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
\7\ Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health centers, rehabilitation and psychiatric
hospitals, etc.
[[Page 55094]]
Table 3--Derivation of Monthly Actuarial Rate for Enrollees Age 65 and Over for Financing Periods Ending
December 31, 2006 Through December 31, 2009
----------------------------------------------------------------------------------------------------------------
Financing periods
---------------------------------------------------------------
CY 2006 CY 2007 CY 2008 CY 2009
----------------------------------------------------------------------------------------------------------------
Covered services (at level recognized):
Physician fee schedule...................... 79.95 78.54 77.77 80.19
Durable medical equipment................... 9.77 9.66 9.70 9.82
Carrier lab \1\............................. 3.75 3.89 3.96 4.22
Other carrier services \2\.................. 19.61 19.75 20.13 21.62
Outpatient hospital......................... 28.50 29.61 29.96 30.98
Home health................................. 8.62 10.06 10.66 11.03
Hospital lab \3\............................ 2.82 2.81 2.81 2.92
Other intermediary services \4\............. 12.75 13.25 13.59 14.03
Managed care................................ 34.84 42.41 51.04 57.15
---------------------------------------------------------------
Total services.......................... 200.61 209.97 219.62 231.96
Cost sharing:
Deductible.................................. -5.05 -5.33 -5.50 -5.50
Coinsurance................................. -31.18 -30.73 -30.49 -31.18
---------------------------------------------------------------
Total benefits.......................... 164.39 173.91 183.63 195.28
Administrative expenses......................... 7.89 5.69 3.28 3.20
---------------------------------------------------------------
Incurred expenditures........................... 172.28 179.60 186.91 198.47
Value of interest............................... -1.52 -1.98 -2.48 -2.63
Contingency margin for projection error and to 6.14 9.38 8.27 -3.14
amortize the surplus or deficit................
---------------------------------------------------------------
Monthly actuarial rate.................. 176.90 187.00 192.70 192.70
----------------------------------------------------------------------------------------------------------------
\1\ Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab.
\2\ Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services,
parenteral and enteral drug costs, supplies, etc.
\3\ Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
\4\ Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health
centers, and rehabilitation and psychiatric hospitals, etc.
Table 4--Derivation of Monthly Actuarial Rate for Disabled Enrollees for Financing Periods Ending December 31,
2006 Through December 31, 2009
----------------------------------------------------------------------------------------------------------------
Financing periods
---------------------------------------------------------------
CY 2006 CY 2007 CY 2008 CY 2009
----------------------------------------------------------------------------------------------------------------
Covered services (at level recognized):
Physician fee schedule...................... 79.80 79.03 80.09 83.67
Durable medical equipment................... 16.91 17.10 17.80 18.33
Carrier lab \1\............................. 4.62 5.13 5.43 5.86
Other carrier services \2\.................. 22.47 23.26 24.94 27.13
Outpatient hospital......................... 38.16 40.05 41.81 43.81
Home health................................. 7.07 8.29 9.03 9.49
Hospital lab \3\............................ 4.27 4.42 4.56 4.80
Other intermediary services \4\............. 39.91 41.08 42.30 43.45
Managed care................................ 23.30 30.30 36.77 41.98
---------------------------------------------------------------
Total services.......................... 236.52 248.66 262.74 278.52
Cost sharing:
Deductible.................................. -4.71 -4.86 -5.14 -5.15
Coinsurance................................. -44.03 -44.19 -44.89 -46.45
---------------------------------------------------------------
Total benefits.......................... 187.79 199.61 212.70 226.92
Administrative expenses......................... 4.96 3.88 3.55 3.44
---------------------------------------------------------------
Incurred expenditures........................... 192.75 203.49 216.25 230.36
Value of interest............................... -3.49 -3.40 -3.61 -6.17
Contingency margin for projection error and to 14.44 -2.79 -2.94 0.01
amortize the surplus or deficit................
---------------------------------------------------------------
Monthly actuarial rate.................. 203.70 197.30 209.70 224.20
----------------------------------------------------------------------------------------------------------------
\1\ Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab.
\2\ Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services,
parenteral and enteral drug costs, supplies, etc.
\3\ Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
[[Page 55095]]
\4\ Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health
centers, rehabilitation and psychiatric hospitals, etc.
Table 5--Actuarial Status of the Part B Account in the SMI Trust Fund Under Three Sets of Assumptions for
Financing Periods Through December 31, 2009
----------------------------------------------------------------------------------------------------------------
As of December 31, CY 2007 CY 2008 CY 2009
----------------------------------------------------------------------------------------------------------------
This projection:
Actuarial status (in millions):
Assets................................................... 51,358 59,088 58,618
Liabilities.............................................. 12,773 12,269 12,736
--------------------------------------------------
Assets less liabilities.................................. 38,585 46,819 45,882
Ratio (in percent) \1\................................... 20.2 22.7 23.1
Low cost projection:
Actuarial status (in millions):
Assets................................................... 51,358 65,860 78,759
Liabilities.............................................. 12,773 11,517 12,061
--------------------------------------------------
Assets less liabilities.................................. 38,585 54,343 66,697
Ratio (in percent) \1\................................... 21.0 28.3 37.4
High cost projection:
Actuarial status (in millions):
Assets................................................... 51,358 52,592 38,854
Liabilities.............................................. 12,773 12,991 13,453
--------------------------------------------------
Assets less liabilities.................................. 38,585 39,601 25,400
Ratio (in percent) \1\................................... 19.5 17.9 11.5
----------------------------------------------------------------------------------------------------------------
\1\ Ratio of assets less liabilities at the end of the year to the total incurred expenditures during the
following year, expressed as a percent.
III. Regulatory Impact Analysis
We have examined the impacts of this notice as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993, as further amended), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999),
and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 (as amended by Executive Order 13258) directs
agencies to assess all costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts,
and equity). A regulatory impact analysis (RIA) must be prepared for
major rules with economically significant effects ($100 million or more
in any one year).
We have examined the impact of this notice as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review) and the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, if regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity).
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 million in any one year. Individuals and States
are not included in the definition of a small entity. This notice will
not have a significant impact on a substantial number of small
businesses or other small entities. Therefore, the Secretary has
determined that this notice will not have a significant economic impact
on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. We have determined that
this notice will not have a significant effect on a substantial number
of small entities or on the operations of a substantial number of small
rural hospitals. Therefore, we are not preparing analyses for either
the RFA or section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2008, that
threshold is approximately $130 million. This notice has no
consequential effect on State, local, or tribal governments. We believe
the private sector costs of this notice fall below this threshold as
well.
Executive Order 13132 establishes certain requirements that an
agency must meet when it publishes a proposed rule (and subsequent
final rule) that imposes substantial direct compliance costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have determined that this notice does not
significantly affect the rights, roles, and responsibilities of States.
This notice announces that the monthly actuarial rates applicable
for 2009 are $192.70 for enrollees age 65 and over and $224.20 for
disabled enrollees under age 65. It also
[[Page 55096]]
announces the 2009 monthly Part B premium rates to be paid by
beneficiaries who file an individual tax return (including those who
are single, head of household, qualifying widow(er) with a dependent
child, or married filing separately who lived apart from their spouse
for the entire taxable year), or a joint tax return.
----------------------------------------------------------------------------------------------------------------
Income-related
Beneficiaries who file an individual tax Beneficiaries who file a joint monthly Total monthly
return with income: tax return with income: adjustment premium amount
amount
----------------------------------------------------------------------------------------------------------------
Less than or equal to $85,000................. Less than or equal to $170,000.. $0.00 $96.40
Greater than $85,000 and less than or equal to Greater than $170,000 and less 38.50 134.90
$107,000. than or equal to $214,000.
Greater than $107,000 and less than or equal Greater than $214,000 and less 96.30 192.70
to $160,000. than or equal to $320,000.
Greater than $160,000 and less than or equal Greater than $320,000 and less 154.10 250.50
to $213,000. than or equal to $426,000.
Greater than $213,000......................... Greater than $426,000........... 211.90 308.30
----------------------------------------------------------------------------------------------------------------
In addition, the monthly premium rates to be paid by beneficiaries
who are married and lived with their spouse at any time during the
taxable year, but file a separate tax return from their spouse, are
also announced and listed below.
------------------------------------------------------------------------
Beneficiaries who are married and lived Income-related
with their spouse at any time during the monthly Total monthly
year, but file a separate tax return adjustment premium amount
from their spouse: amount
------------------------------------------------------------------------
Less than or equal to $85,000........... $0.00 $96.40
Greater than $85,000 and less than or 154.10 250.50
equal to $128,000......................
Greater than $128,000................... 211.90 308.30
------------------------------------------------------------------------
The Part B deductible for calendar year 2009 is $135.00. The
standard Part B premium rate of $96.40 is the same as the premium rate
for 2008, so there will be no additional costs to the approximately
42.3 million Part B enrollees for 2009. The monthly impact on the
beneficiaries who are required to pay a higher premium for 2009 because
their incomes exceed specified thresholds is $38.50, $96.30, $154.10,
or $211.90, which is in addition to the standard monthly premium. These
amounts are higher than the 2008 amounts of $25.80, $64.50, $103.30,
and $142.00, respectively, which results in $770 million in additional
costs to the approximately 1.7 million Part B enrollees who are
affected. Therefore, this notice is a major rule as defined in 5 U.S.C.
804(2) and is an economically significant rule under Executive Order
12866.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
IV. Waiver of Proposed Notice
The Medicare statute requires the publication of the monthly
actuarial rates and the Part B premium amounts in September. We
ordinarily use general notices, rather than notice and comment
rulemaking procedures, to make such announcements. In doing so, we note
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, for
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 formulas
used to calculate the Part B premiums are statutorily directed, and we
can exercise no discretion in applying those formulas. Moreover, the
statute establishes the time period for which the premium rates will
apply, and delaying publication of the Part B premium rate such that it
would not be published before that time would be contrary to the public
interest. Therefore, we find good cause to waive publication of a
proposed notice and solicitation of public comments.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: September 12, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Michael O. Leavitt,
Secretary.
[FR Doc. E8-22314 Filed 9-19-08; 9:00 am]
BILLING CODE 4120-01-P
