Medicare Program; Part A Premium for 2000 for the Uninsured Aged and for Certain Disabled Individuals Who Have Exhausted Other Entitlement

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-8004-N]

RIN 0938-AB53

Medicare Program; Part A Premium for 2000 for the Uninsured Aged

and for Certain Disabled Individuals Who Have Exhausted Other

Entitlement

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the hospital insurance premium for

calendar year 2000 under Medicare's

[[Page 57111]]

hospital insurance program (Part A) for 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,

2000 for these individuals is $301. The reduced premium for certain

other individuals as described in this notice is $166. Section 1818(d)

of the Social Security Act specifies the method to be used to determine

these amounts.

EFFECTIVE DATE: This notice is effective on January 1, 2000.

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 for social security or

railroad retirement benefits and do not otherwise meet the requirements

for entitlement to Medicare Part A. (Persons insured under the Social

Security or Railroad Retirement Acts need not 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, during September of each year, determine

the monthly actuarial rate (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 1999 premium under this method was $309 and was effective

January 1, 1999. (See 63 FR 56212, October 21 ,1998.)

Section 1818(d)(2) of the Act requires us to determine and publish,

during September of each calendar year, the amount of the monthly

premium for the following calendar year for persons who voluntarily

enroll in Medicare Part A.

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

individuals are those not now entitled but who have been entitled under

section 226(b) of the Act, who continue to have the disabling

impairment upon which their entitlement was based, and whose

entitlement ended solely because they had earnings that exceeded the

substantial gainful activity amount (as defined in section 223(d)(4) of

the Act).

Section 1818A(d)(2) of the Act specifies that the premium

determined under section 1818(d)(2) 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 monthly premium amount for certain voluntary

enrollees. The reduction applies for an individual who is not eligible

for social security or railroad retirement benefits but who--

Has at least 30 quarters of coverage under title II of the

Act;

Is married and has been married for the previous 1-year

period to a person who has at least 30 quarters of coverage;

Had been married for at least 1 year at the time of the

person's death to a person who had at least 30 quarters of coverage; or

Is divorced from a person who at the time of divorce had

at least 30 quarters of coverage if the marriage lasted at least 10

years.

For calendar year 2000, section 1818(d)(4)(A) of the Act specifies

that the monthly premium that these individuals will pay for calendar

year 2000 will be equal to the monthly premium for aged voluntary

enrollees reduced by 45 percent.

II. Premium Amount for 2000

Under the authority of sections 1818(d)(2) and 1818A(d)(2) of the

Act, the Secretary has determined that the monthly Medicare part A

hospital insurance premium for the uninsured aged and for certain

disabled individuals who have exhausted other entitlement for the 12

months beginning January 1, 2000 is $301.

The monthly premium for those individuals subject to a 45 percent

reduction in the monthly premium for the 12-month period beginning

January 1, 2000 is $166.

III. Statement of Actuarial Assumptions and Bases Employed in

Determining the Monthly Premium Rate.

As discussed in section I of this notice, the monthly Medicare part

A premium for 2000 is equal to the estimated monthly actuarial rate for

2000 rounded to the nearest multiple of $1. The monthly actuarial rate

is defined to be one-twelfth of the average per capita amount that the

Secretary estimates will be paid from the Federal Hospital Insurance

Trust Fund for services performed and related administrative costs

incurred in 2000 for individuals aged 65 and over who will be entitled

to benefits under the hospital insurance program. Thus, the number of

individuals aged 65 and over who will be entitled to hospital insurance

benefits and the costs incurred on behalf of these beneficiaries must

be projected to determine the premium rate.

The principal steps involved in projecting the future costs of the

hospital insurance program are (a) Establishing the present cost of

services furnished to beneficiaries, by type of service, to serve as a

projection base; (b) Projecting increases in payment amounts for each

of the various service types; and (c) Projecting increases in

administrative costs. Establishing historical Medicare part A

enrollment and projecting future enrollment, by type of beneficiary, is

part of this process.

We have completed all of the above steps, basing our projections

for 2000 on (a) Current historical data and (b) Projection assumptions

under current law from the Midsession Review of the President's Fiscal

Year 2000 Budget. It is estimated that in calendar year 2000, 33.586

million people aged 65 and over will be entitled to Medicare part A

benefits (without premium payment), and that these individuals will, in

2000, incur $121.285 billion of benefits for services performed and

related administrative costs. Thus, the estimated monthly average per

capita amount is $300.93 and the monthly premium is $301. The monthly

premium for those individuals eligible to pay this premium reduced by

45 percent is $166.

IV. Costs to Beneficiaries

The 2000 Medicare part A premium of $301 is about 2.6 percent lower

than the 1999 premium of $309.

We estimate that there will be, in calendar year 2000,

approximately 365,000 enrollees who do not otherwise meet the

requirements for entitlement, and will voluntarily enroll in Medicare

part A by paying the full premium. We estimate an additional 9,000

enrollees will be paying the reduced premium. The estimated overall

effect of the changes in the premium will be a savings to these

voluntary enrollees of about $3 million.

[[Page 57112]]

V. Waiver of Notice of Proposed Rulemaking

The Medicare statute, as discussed previously, requires publication

of the Medicare Part A hospital insurance premium for the upcoming

calendar year during September of each year. The amounts are determined

according to the statute. As has been our custom, we use general

notices, rather than formal notice and comment rulemaking procedures,

to make the announcements. In doing so, we acknowledge that, under the

Administrative Procedure Act, interpretive rules, general statements of

policy, and rules of agency organization, procedure, or practice are

excepted from the requirements of notice and comment rulemaking.

We considered publishing a proposed notice to provide a period for

public comment. However, we may waive that procedure if we find good

cause that prior notice and comment are impracticable, unnecessary, or

contrary to the public interest. We find that the procedure for notice

and comment is unnecessary because the formula used to calculate the

Part A hospital insurance premium is statutorily directed, and we can

exercise no discretion in following that formula. Moreover, the statute

established the time period for which the premium will apply and

delaying publication of the premium amount would be contrary to the

public interest. Therefore, we find good cause to waive publication of

a proposed notice and solicitation of public comments.

VI. Regulatory Impact Statement

We have examined the impacts of this notice as required by

Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Pub. L.

96-354). Executive Order 12866 directs agencies to assess all costs and

benefits of available regulatory alternatives and, when regulation is

necessary, to select regulatory approaches that maximize net benefits

(including potential economic, environmental, public health and safety

effects; distributive impacts; and equity). The RFA requires agencies

to analyze options for regulatory relief for small businesses. For

purposes of the RFA, States and individuals are not considered small

entities.

Also, section 1102(b) of the Act requires the Secretary to prepare

a regulatory impact analysis for any notice that may have a significant

impact on the operations of a substantial number of small rural

hospitals. Such an analysis must conform to the provisions of section

604 of the RFA. For purposes of section 1102(b) of the Act, we consider

a small rural hospital as a hospital that is located outside of a

Metropolitan Statistical Area and has fewer than 50 beds.

As stated previously in section IV, the estimated overall effect of

the changes in the premium will be a savings to voluntary enrollees of

about $3 million. Therefore, this notice is not a major rule as defined

in Title 5, United States Code, section 804(2) and is not an

economically significant rule under Executive Order 12866.

Therefore, we have determined, and the Secretary certifies, that

this notice will not result in a significant impact on a substantial

number of small entities and will not have a significant effect on the

operations of a substantial number of small rural hospitals. Therefore,

we are not preparing analyses for either the RFA or section 1102(b) of

the Act.

In accordance with the provisions of Executive Order 12866, this

notice was reviewed by the Office of Management and Budget.

We have reviewed this notice under the threshold criteria of

Executive Order 13132, Federalism. We have determined that it does not

significantly affect the rights, roles, and responsibilities of States.

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: October 13, 1999.

Michael M. Hash,

Deputy Administrator, Health Care Financing Administration.

Dated: October 18, 1999.

Donna E. Shalala,

Secretary.

[FR Doc. 99-27626 Filed 10-19-99; 11:35 am]

BILLING CODE 4120-01-P