Medicare News
| For Immediate Release: | Contact: |
| Tuesday, October 30, 2001 | CMS Office of Public Affairs 202-690-6145 |
For questions about Medicare please call 1-800-MEDICARE or visit www.medicare.gov. |
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MEDICARE SPENDING INCREASES MORE THAN 10% IN 2001
LARGEST GROWTH IN SPENDING SINCE 1995; MEDICAID ALSO HITS DOUBLE DIGITS
Fiscal year 2001 closed October 1 and the latest spending projections estimate that total Medicare benefit spending was more than 10 percent higher in 2001 than 2000, the largest rate in growth since 1995.
Medicare cost increases are expected from year to year as a result of growth in the number of beneficiaries, general and medical inflation, increases in the utilization of health services, and the increasing complexity of the services provided, as technological innovations enable more sophisticated treatments.
Recently, HHS announced increases in the Medicare premium, deductible and coinsurance amounts to be paid by beneficiaries. The Medicare Part A deductible for 2002 will be $812 and the Part B premium will rise to $54 per month. The Part B premium, which charges seniors and the disabled 25 percent of Medicare Part costs, increased 8 percent, reflecting the fact that these higher costs get passed on, in part, to the seniors and disabled people who rely on Medicare coverage.
Part B costs, largely physician and outpatient costs, increased by over 13 percent. In part, this inflation generates the 8 percent premium increases, and results in far higher beneficiary hospital outpatient costs which get passed on to seniors and the disabled through the substantial outpatient copayments.
“The exploding cost inflation that has returned to the Medicare program after years of relative stability is not good for anyone – the beneficiary, the taxpayers or the long term health of our delivery systems,” said Centers for Medicare & Medicaid Services Administrator Tom Scully. “The increase in spending should refocus all of us who care about health issues on overall costs. That’s why it’s so important that we work with the health care community to ensure the stability of Medicare and Medicaid.”
Federal expenditures for the Medicaid program also increased by 10.7 percent in fiscal year 2001. As with Medicare, this increase was greater than the levels prevailing in recent years. Increasing costs for providing prescription drugs under Medicaid were one of many factors contributing to the rapid overall expenditure increase. The increase in federal Medicaid expenditures for fiscal year 2002 is expected to continue in the 10 percent range.
