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Medicare Offers Smallest Rise in Premiums in 6 Years
Date:10/1/2007

in premiums is also tied to the necessity of raising Medicare Part B's contingency trust fund, which stockpiles money to pay for unexpected costs.

Increasing the fund is needed to offset increased doctor's fees, Weems said. While doctors fees charged to Medicare were expected to fall by 10 percent in 2008, Weems said he expects Congress will block that scheduled fee reduction.

Therefore,"it is appropriate to maintain a larger Part B contingency reserve than would otherwise be necessary," Weems explained.

He believes that Medicare recipients are still getting more benefits than they have ever gotten before. "The cost of the new drug benefit has come in far lower than previously projected," he said. "Medicare recipients are paying far lower out-of-pocket costs for drugs and seeing better coordinated care," Weems said

One expert was upbeat about the announcement.

"The relatively small increases underscore what an efficient national treasure Medicare is," said Robert Hayes, the president of the the Medicare Rights Center, a New York City-based advocacy group. "The economies of Medicare cry out for its use as a model to cover people who are uninsured throughout the country," he added.

Seniors may still be in for some fiscal surprises in 2008, however. In a study released Monday, experts at Consumer's Union (the publisher of Consumer Reports) warned that most insurers bump up the prices for drugs covered by the Medicare Part D drug benefit -- after enrollees have already committed to a particular plan.

"It makes no sense to ask a senior to carefully shop around [for a plan] in October and sign up for a plan, when the plan turns around a few months later and dramatically hikes the cost of the medicines," Bill Vaughan, senior health policy analyst at Consumers Union, said in a statement.

Tracking the period from February to September 2007, the group found that 95 percent of pl
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