Going up, again

            WASHINGTON - The standard Medicare Part B monthly premium will be $93.50 in 2007, up $5 or 5.6% from the current $88.50. This is the least percentage rise in the Part B premium since 2001 and less than half of the dollar rise in 2006. Together with a rise of 0.1% in the average Part D enrollee premium - and less if beneficiaries choose lower-cost drug plan options, as they did for 2006 - beneficiaries are experiencing cost rises that are modest versus recent healthcare trends. This is less than the projected 6% rise in per capita national health spending for 2007 and the projected 7% rise for 2007 retail prescription spending. More than 25% of beneficiaries can receive assistance that pays their entire Part B premium. Growth in traditional fee-for-service Part B spending per capita, and not spending in the Medicare Advantage program, accounts for the bulk of the premium rise. Very rapid growth in spending for hospital outpatient services is a major contributor to the premium rise. Although outpatient hospital spending accounts for only about 13% of total Part B spending, it accounts for 33% of the rise in the 2007 premium. Hospital spending accounts for more of the premium growth than spending growth for physician-related services, including lab tests and physician-administered drugs, which together account for a greater share of the total Part B spending. The income-related Part B premiums for 2007 will be $106.00, $124.70, $143.40, or $162.10, depending on the extent to which a beneficiary's income exceeds $80,000 (or a married couple's income exceeds $160,000), with the highest premium rates only paid by less than 1% of beneficiaries whose incomes are over $200,000 ($400,000 for a married couple). A beneficiary who pays the highest income-related premium in 2007 would pay $1,945 per year in Part B premiums, but is estimated to receive an average of $4,363 in Medicare Part B benefits.