Medicare Part B Premium Rate and Annual Deductible for Calendar Year 2010

CMS also announced Thursday the standard monthly Part B premium rate of $110.50 for CY 2010 and the annual deductible amount of $155.00 for CY 2010. The standard premium rate of $110.50 for next year reflects an increase of $14.10 over the CY 2009 rate of $96.40. CMS uses statutorily prescribed formulas to calculate the standard premium rate for Part B, the voluntary portion of the Medicare program that covers physician services, outpatient hospital services, and other medical and health services that are not covered by Part A.

The standard premium amount of $110.50 represents approximately 25% of the estimated total cost to the Medicare program of Part B coverage for an aged enrollee. Beginning in 2007, beneficiaries who reach certain income thresholds pay higher than standard premiums, depending on income and tax filing status. In other words, the Part B premium subsidy is reduced for those beneficiaries.

In setting the standard premium rate for CY 2010, CMS recognized a “strong possibility of substantial increases in Part B expenditures that would result” from legislation overriding the scheduled decrease in physicians’ fees in 2010. Accordingly, CMS adjusted the monthly actuarial rate—the approximate actual cost of coverage—to account for this factor. The actuarial rate determines both the standard premium amount and the increase in the annual deductible from year to year.