Medicare to begin charging wealthier seniors more

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CHICAGO (Reuters) – The U.S. Medicare program will charge lower than expected premiums next year in the U.S. health insurance plan for the elderly, but wealthier recipients for the first time will pay more for doctor visits and other care outside the hospital.

The U.S. Centers for Medicare and Medicaid Services said the average premium of $93.50 will be a 5.6 percent increase from this year, the lowest increase in five years because of moderation in spending on doctor services.

But for the first time, about 4 percent of Medicare enrollees, or 1.5 million of 42 million beneficiaries, will pay a bigger premium based on their incomes. Individuals earning more than $80,000 a year, or married couples earning over $160,000, will pay more based on income.

The tiering of payments by income, which is being phased in over three years, was enacted in a 2003 Medicare law and begins in 2007. The measures are expected to save Medicare about $21 billion over 10 years.

Medicare spending on so-called Part B services — doctor fees, physician-administered services and outpatient hospital care — ran a deficit of $10.3 billion in 2003, according to the agency.

Spending on Part B services is expected to double over the next 10 years and grow faster as baby boomers begin to enter the program in 2010.

Officials said they do expect a small number of Medicare recipients to drop out of the program because of the new income-weighted premiums.

They expect about 9,000 Medicare beneficiaries to drop out in 2007 and 30,000 by 2010.

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