Medicare Premiums 2009

For Most, Medicare Premiums Won't Rise in 2009
Medicare premiums will hold steady in 2009 for the vast majority of the 44 million U.S. beneficiaries, the first time since 2000 that rates haven't gone up.

Monthly premiums for about 95 percent of elderly and disabled Medicare recipients will be $96.40 next year, the Centers for Medicare and Medicaid Services reported Friday.

The announcement may seem surprising, given the fact that medical costs continue to outpace inflation. But Medicare officials said many unusual factors contributed to what will be just the sixth year without a premium increase since Medicare began in 1965.

Premiums have risen in recent years - more than 17 percent in 2005 - in part because Medicare had to build up reserves to offset changes made by Congress to adjust physician payments. Those reserves finally have reached adequate levels.

"It was painful to catch up, but now we have one year in which we can get rid of the catch-up amount and use that to offset the premium increases that otherwise would have happened," said Richard Foster, Medicare's chief actuary, estimating that next year's increases would have been about 8.5 percent.

In addition, the government also discovered an accounting error that benefits next year's rates.

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