Congressional Research Services Report Examines Part B Premium Trends

The Congressional Research Services (CRS) recently released an update to its report on the Medicare Part B premium. The report, prepared for Members of Congress, discusses a wide range of issues related to the Part B premium, including determination of annual premium amounts; collection of premiums; Part B eligibility and enrollment; late enrollment penalties; premiums for high-income enrollees; and premium assistance for enrollees with low incomes. The report also discusses historical Medicare part B premium trends: according to the CRS report, the Part B premium has risen from $3.00 in 1966 to its current amount of $104.90. Average annual Part B costs have also increased—from about $101 per beneficiary in 1970 to a projected $5,222 per beneficiary in 2012. In 2000, the Medicare Part B premium was $45.50, and it has more than doubled since then.

Each year, actuaries at the Centers for Medicare & Medicaid Services (CMS) estimate total per enrollee Part B costs for older adult Medicare beneficiaries (those 65 and older) for the following year and then set the Part B premium to cover 25 percent of these expected expenditures. The CMS Office of the Actuary suggests that over the next 10 years, Part B premiums will increase more slowly than they have over the last decade, primarily due to provisions in the Affordable Care Act (ACA) that are expected to slow the rate of growth for Part B spending.

Read the CRS report.