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Monthly Medicare Premiums Will Climb from $15.50 to $17.90.

October 1, 1986

WASHINGTON (AP) _ Government officials said today the monthly premium that the nation’s 30 million Medicare patients pay for physicians’ services will climb on Jan. 1 from $15.50 to $17.90.

That is a 15.5 percent increase, and it will come at the same time that the elderly face steeper charges for the first day they spend in a hospital in 1987.

However, about 600,000 retirees who get relatively low Social Security benefits stand to get a break on the Medicare Part B premium increase.

Beneficiaries have the monthly premiums deducted from their Social Security checks, and a provision in the law will spare the 600,000 from getting lower checks in 1987 than they now get.

Normally, benefits rise on Jan. 1 each year only if the Consumer Price Index has risen 3 percent or more, and this year the inflation rate has been less than half that. However, Congress is expected to waive the 3 percent trigger and give the nation’s elderly a Social Security increase on Jan. 1.

James M. Brown, a Social Security spokesman, said today it is likely to be in the 1 percent to 1.5 percent range - the lowest since benefits were hitched to the inflation index in 1975.

At the same time, he said, a provision in the law will ensure that no one’s Medicare Part B premium, which is for physicians’ services, goes up more than his or her basic Social Security benefits.

For instance, he said, if the cost-of-living adjustment is 1 percent, a person drawing $200 a month from Social Security would get a $2 hike. That person’s Medicare Part B premium could only rise from $15.50 to $17.50. The bottom line is that person would continue getting the same benefit check each month, not less.

″About 600,000 would get a reduction in their benefits because of the premium increase except for this hold-harmless provision,″ said Brown.

The Medicare Part B premium goes up as the cost of providing the physicians’ services and other care rises. Those expenses usually rise faster than the general rate of inflation. The premiums paid by the elderly only cover 25 percent of the cost of the coverage. The rest comes from general revenues.

However, if Social Security benefits did not go up, the Medicare Part B premium would remain frozen at $15.50 in 1987.

The average retired worker was getting $478 a month from Social Security after last January’s 3.1 percent increase.

Congress is also working to hold down the increase in Medicare’s charge for patients’ first day in the hospital. The Health Care Financing Administration announced Sept. 15 that the charge would jump from $492 to $572 on Jan. 1.

However, the House is seeking to limit the charge to $500 in 1987, while the Senate wants it set at $520. A compromise is expected before the lawmakers adjourn for the fall elections. John Kitrell, a spokesman for the Health Care Financing Administration, said the formal announcement of the Part B premium increase will appear in the Federal Register on Thursday.

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