[Federal Register: October 24, 2003 (Volume 68, Number 206)]
[Notices]
[Page 61002-61004]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24oc03-102]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8018-N]
RIN 0938-AM33
Medicare Program; Part A Premium for 2004 for the Uninsured Aged
and for Certain Disabled Individuals Who Have Exhausted Other
Entitlement
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
[[Page 61003]]
ACTION: Notice.
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SUMMARY: This notice announces the Hospital Insurance premium for
calendar year 2004 under Medicare's Hospital Insurance program (Part A)
for the uninsured, not otherwise eligible aged (hereafter known as the
``uninsured aged'') and for certain disabled individuals who have
exhausted other entitlement. The monthly Medicare Part A premium for
the 12 months beginning January 1, 2004 for these individuals is $343.
The reduced premium for certain other individuals as described in this
notice is $189. Section 1818(d) of the Social Security Act specifies
the method to be used to determine these amounts.
EFFECTIVE DATE: This notice is effective January 1, 2004.
FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1818 of the Social Security Act (the Act) provides for
voluntary enrollment in the Medicare Hospital Insurance program
(Medicare Part A), subject to payment of a monthly premium, of certain
persons aged 65 and older who are uninsured under the Old-Age,
Survivors and Disability Insurance (OASDI) program or the Railroad
Retirement Act and do not otherwise meet the requirements for
entitlement to Medicare Part A. (Persons insured under the OASDI
program or the Railroad Retirement Act and certain others do not have
to pay premiums for hospital insurance.)
Section 1818(d) of the Act requires us to estimate, on an average
per capita basis, the amount to be paid from the Federal Hospital
Insurance Trust Fund for services performed and related administrative
costs incurred in the following calendar year with respect to
individuals aged 65 and over who will be entitled to benefits under
Medicare Part A. We must then determine, during September of each year,
the monthly actuarial rate for the following year (the per capita
amount estimated above divided by 12) and publish the dollar amount for
the monthly premium in the succeeding calendar year. If the premium is
not a multiple of $1, the premium is rounded to the nearest multiple of
$1 (or, if it is a multiple of 50 cents but not of $1, it is rounded to
the next highest $1). The 2003 premium under this method was $316 and
was effective January 1, 2003. (See 67 FR 64649, October 21, 2002.)
Section 1818A of the Act provides for voluntary enrollment in
Medicare Part A, subject to payment of a monthly premium, of certain
disabled individuals who have exhausted other entitlement. These are
individuals who are not currently entitled to Part A coverage, but who
were entitled to coverage due to a disabling impairment under section
226(b) of the Act, and who would still be entitled to Part A coverage
if their earnings had not exceeded the statutorily defined substantial
gainful activity amount (section 223(d)(4) of the Act).
Section 1818A(d)(2) of the Act specifies that the provisions
relating to premiums under section 1818(d) through (f) of the Act for
the aged will also apply to certain disabled individuals as described
above.
Section 13508 of the Omnibus Budget Reconciliation Act of 1993
(Pub. L. 103-66) amended section 1818(d) of the Act to provide for a
reduction in the premium amount for certain voluntary (section 1818 and
1818A) enrollees. The reduction applies to an individual who is
eligible to buy into the Medicare Part A program and who, as of the
last day of the previous month--
[sbull] Had at least 30 quarters of coverage under title II of the
Act;
[sbull] Was married, and had been married for the previous 1-year
period, to a person who had at least 30 quarters of coverage;
[sbull] Had been married to a person for at least 1 year at the
time of the person's death if, at the time of death, the person had at
least 30 quarters of coverage; or
[sbull] Is divorced from a person and had been married to the
person for at least 10 years at the time of the divorce if, at the time
of the divorce, the person had at least 30 quarters of coverage.
Section 1818(d)(4)(A) of the Act specifies that the premium that
these individuals will pay for calendar year 2004 will be equal to the
premium for uninsured aged enrollees reduced by 45 percent.
II. Monthly Premium Amount for 2004
The monthly premium for the uninsured aged and certain disabled
individuals who have exhausted other entitlement, for the 12 months
beginning January 1, 2004, is $343.
The monthly premium for those individuals subject to the 45-percent
reduction in the monthly premium is $189.
III. Monthly Premium Rate Calculation
As discussed in section I of this notice, the monthly Medicare Part
A premium is equal to the estimated monthly actuarial rate for 2004
rounded to the nearest multiple of $1 and equals one-twelfth of the
average per capita amount, which is determined by projecting the number
of individuals aged 65 and over entitled to Hospital Insurance and the
benefits and administrative costs that will be incurred on their
behalf.
The steps involved in projecting these future costs to the Federal
Hospital Insurance Trust Fund are:
[sbull] Establishing the present cost of services furnished to
beneficiaries, by type of service, to serve as a projection base;
[sbull] Projecting increases in payment amounts for each of the
service types; and
[sbull] Projecting increases in administrative costs.
We base our projections for 2004 on (a) current historical data,
and (b) projection assumptions derived from current law and the Mid-
Session Review of the President's Fiscal Year 2004 Budget.
We estimate that in calendar year 2004, 34.476 million people aged
65 and over will be entitled to benefits (without premium payment) and
that they will incur $141.849 billion of benefits and related
administrative costs. Thus, the estimated monthly average per capita
amount is $342.87 and the monthly premium is $343. The full monthly
premium reduced by 45 percent is $189.
IV. Costs to Beneficiaries
The 2004 premium of $343 is about 9 percent higher than the 2003
premium of $316.
We estimate that approximately 425,000 enrollees will voluntarily
enroll in Medicare Part A by paying the full premium. We estimate an
additional 1,000 enrollees will pay the reduced premium. We estimate
that the aggregate cost to enrollees paying these premiums will be
about $138 million in 2004 over 2003.
V. Waiver of Notice of Proposed Rulemaking
We are not using notice and comment rulemaking in this notification
of Part A premiums for 2004, as that procedure is unnecessary because
of the lack of discretion in the statutory formula that is used to
calculate the premium and the solely ministerial function that this
notice serves. The Administrative Procedure Act permits agencies to
waive notice and comment rulemaking when this notice and public comment
thereon are unnecessary. On this basis, we waive publication of a
proposed notice and a solicitation of public comments.
VI. Regulatory Impact Statement
We have examined the impacts of this notice as required by
Executive Order
[[Page 61004]]
12866 (September 1993, Regulatory Planning and Review), the Regulatory
Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), section
1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of
1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). As stated in Section IV of
this notice, we estimate that the overall effect of these changes in
the premium will be a cost to voluntary (section 1818 and 1818A)
enrollees of about $138 million. Therefore, this notice is a major rule
as defined in Title 5, United States Code, section 804(2) and is an
economically significant rule under Executive Order 12866.
The RFA requires agencies to analyze options for regulatory relief
of small entities. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $6
million to $29 million in any 1 year. Individuals and States are not
considered to be small entities. We have determined that this notice
will not have a significant economic impact on a substantial number of
small entities. Therefore, we are not preparing an analysis for the
RFA.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. We have determined that
this notice will not have a significant effect on the operations of a
substantial number of small rural hospitals. Therefore, we are not
preparing an analysis for section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditures in any 1 year by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $110 million. This notice has no consequential
effect on State, local, or tribal governments or on the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct requirement costs on State and local governments, preempts State
law, or otherwise has Federalism implications. This notice will not
have a substantial effect on State or local governments.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
Authority: Sections 1818(d)(2) and 1818A(d)(2) of the Social
Security Act (42 U.S.C. 1395i-2(d)(2) and 1395i-2a(d)(2)).
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 12, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
Dated: October 3, 2003.
Tommy G. Thompson,
Secretary.
[FR Doc. 03-26457 Filed 10-16-03; 10:06 am]
BILLING CODE 4120-01-P