Medicare Part B premiums are increasing to $54 per month for 2002. Medicare expenditures increased about 10% for the government fiscal year that ended September 30, 2001, according to congressional budget analysts. By law, the premium that Medicare beneficiaries pay is 25% of program costs, with the government covering the other 75%.
The increases are due in part to rising health care costs. In 1999 and 2000 lawmakers approved higher reimbursements to hospitals, HMOs, and nursing homes. Medicare also covers more preventive services such as screenings for colon cancer, osteoporosis, prostate cancer, mammograms, pap tests and pelvic examinations.
More troubling though is the portion of increased Medicare costs that remains unseen -- that's attributable to waste, fraud and abuse. Medicare lost an estimated $11.9 billion to waste, fraud and abuse in 2000, or about 7 cents of every dollar spent. The percentage of Medicare claims routinely reviewed for improper payments has dropped from 17% in 1989 to around 10% in 2000.
Sources: "Medicare Spending Up 8.4%," The Associated Press, August 14, 2001. "Medicare: Successful Reform Requires Meeting Key Management Challenges," Statement of William J. Scanlon, General Accounting Office, July 25, 2001, GAO-01-1006T.
If you would like to read a related article about rising healthcare costs click here: http://www.tscl.org/newContent/101057.asp.
November 2001
This article first appeared in Volume 6, Issue 11 of `The Social Security and Medicare Advisor` newsletter (November/December 2001). To receive future editions of `The Advisor` in its special, free e-mail version, please click here.
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