On September 22, 2006, CMS announced that the standard Medicare Part B monthly premium will be $93.50 in 2007, an increase of $5.00 or 5.6 percent from the current $88.50 Part B premium, considerably lower than was earlier projected. This premium is the smallest percent increase in the Part B premium since 2001 and less than half of the dollar increase in the premium for 2006. Together with an increase of 0.1 percent in the average Part D enrollee premium -- and less if beneficiaries choose lower-cost drug plan options, as they did for 2006 " Medicare beneficiaries are experiencing cost increases that are modest in comparison to recent health care cost trends. This is also less than the projected 6 percent increase in per capita national health spending for 2007 and the projected 7 percent increase for 2007 retail prescription drug spending. In addition, more than one-fourth of beneficiaries can receive assistance that pays for their entire Part B premium. Growth in traditional fee-for-service Part B spending per capita, rather than spending in the Medicare Advantage program, accounts for the bulk of the premium increase. In particular, very rapid growth in spending for hospital outpatient services is a major contributor to the premium increase. In addition to accounting for growth in hospital outpatient services and physician-related services, a portion of the 2007 Part B premium is necessary to increase assets that are held in the Part B account of the trust fund for contingency reserves to a more adequate level. However, the assets needed to replenish the Part B account are significantly less than previously projected. In addition, the Medicare Modernization Act of 2003 (MMA) calls for higher Part B premiums for certain beneficiaries through the use of an "income-related Medicare adjustment amount" added to the standard premium. This provision is expected to impact about 4 percent of Medicare Part B enrollees, beginning in 2007, the first year of a 3-year phase-in. Questions regarding the income-related Part B premium adjustment should be directed to the Social Security Administration (SSA) which is the agency authorized to carry out implementation of this provision. You can also obtain more information by clicking on the link below. | 
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