Record Hike In Medicare Costs

Medicare premiums for doctor visits will rise 17 percent next year, the largest increase in the program's 40-year history, the Bush administration said Friday.

Monthly payments for Part B of the government health care program — 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.

Premiums have been increasing at an accelerating pace in recent years, rising 13.5 percent this year and 8.7 percent the year before that.

Those premiums were set at $3 a month when Medicare began in 1967.

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 services health care that Medicare will begin covering in 2005, including an introductory physical for those who become eligible for Medicare and a screening for diabetes, will help save money for beneficiaries.

"On net, Medicare beneficiaries are saving money," McClellan said.