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Date:  October 13, 1995
For Release:  Immediately
Contact:  HCFA Press Office, (202) 690-6145

HHS Announces Medicare Deductible
and Premium for 1996

The Department of Health and Human Services today announced Medicare's 1996 Part A hospital deductible and the monthly Part B premium to be paid by Medicare beneficiaries. The deductible and premium are recalculated each year to reflect changes in the costs of health care or changes in Medicare law.

The Part A deductible for beneficiaries admitted to hospitals in 1996 will be $736, an increase of $20 over this year. The monthly Part B premium will be $42.50, a decrease of $3.60 per month from the 1995 amount.

Part A Deductible: The Part A deductible is a beneficiary s only cost for up to 60 days of hospital services during a benefit period. The Part A deductible is based on the rates that Medicare pays hospitals for inpatient care. For 1995, the hospital deductible was $716.

For hospital stays longer than 60 days, a beneficiary would be responsible for $184 per day for the 61st through 90th days, and $368 per day for the 91st through the 150th days.

When a beneficiary needs therapeutic care in a skilled nursing facility after at least three consecutive days of inpatient hospital care, Medicare pays 100 percent of covered expenses for the first 20 days. The beneficiary is responsible for $92 per day for the 21st through the 100th day.

Part B Premium: Part B Medicare helps beneficiaries pay for the services of physicians and other medical practitioners, hospital outpatient services, independent clinical laboratory work, and durable medical equipment and supplies.

The 1995 monthly premium rate of $46.10 was set in law in 1990 and intended to cover 25 percent of program costs. However, Part B spending grew more slowly than expected, and in 1995 the premium actually covered 31.5 percent of program costs. As mandated by 1993 law, the premium in 1996 is once again to cover 25 percent of currently estimated costs. Therefore, even though program costs are expected to increase in 1996 relative to 1995, the net effect of lowering the proportion of program costs covered by the premium is that the premium will fall by $3.60 per month in 1996.

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