updated 9/3/2004 5:51:06 PM ET 2004-09-03T21:51:06

Medicare premiums for doctor visits will rise 17 percent next year, the Bush administration said Friday. The $11.60-a-month increase is the largest in the program’s 40-year-history.

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Monthly payments for Part B of the government health care program for older and disabled Americans — doctor visits and most other non-hospital expenses — will jump to $78.20 from $66.60.

The premiums are updated annually under a formula set by law. The federal government picks up about 75 percent of the cost of Part B benefits and beneficiaries pay the rest.

The increase reflects rapidly rising health costs and last year’s Medicare overhaul, said Dr. Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services. For example, the law blocked a planned 4.5 percent cut in Medicare payments to physicians and replaced it with a 1.5 percent increase.

The administration, seeking political advantage among older voters, has tried to depict the Medicare law, with its first-ever prescription drug benefit, as a boon to seniors.

“The new premiums reflect an enhanced Medicare that is providing seniors and people with disabilities with strengthened access to physician services and new preventive benefits,” McClellan said.

But Democrats and other critics have derided the law as a giveaway to insurers, drug makers and medical providers.

Timing of news release draws criticism
The timing of the release — the day following the Republican convention, just before the Labor Day weekend and with a hurricane bearing down on Florida and its nearly 3 million Medicare recipients — drew criticism Friday.

“This is a cynical attempt to bury bad news by leaking it out when you hope no one is watching,” said Rep. Fortney “Pete” Stark, D-Calif. “This administration has had four years to improve Medicare and instead have made it worse. Today’s news reflects the reality, not rhetoric, of this administration’s bad record on Medicare.”

McClellan denied any effort to coordinate the release with events. “We’re getting these numbers out as soon as we can,” he said.

Premiums have been increasing at an accelerating pace in recent years, rising 13.5 percent in 2004 and 8.7 percent last year.

In addition, the deductible for Part B services will rise $10 next year, to $110, another change mandated by the Medicare law.

About 93 percent of Medicare’s 41.8 million beneficiaries are enrolled in Part B, which helps pay for physician services, hospital outpatient care, durable medical equipment and other services, including some home health care.

McClellan said new preventive health services that Medicare will begin covering in 2005, including a physical for those who become eligible for Medicare and screening for diabetes, will help save money for beneficiaries.

The 4.6 million people in Medicare managed care could see their out-of-pocket expenses decline next year, he said.

“On net, Medicare beneficiaries are saving money,” McClellan said.

The government also said the Part A portion of Medicare that pays for hospital stays, skilled nursing facilities and some home health care also will see an increase in the deductible, which will rise $36 to $912 next year. It is a Medicare recipient’s only cost for up to 60 days of inpatient hospital care.

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