2012 Medicare Part a Premiums for Uninsured, Aged and Disabled Who Have Exhausted Other Entitlements

8/3/2019 2012 Medicare Part a Premiums for Uninsured, Aged and Disabled Who Have Exhausted Other Entitlements

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67570 Federal Register / Vol. 76, No. 211/ Tuesday, November 1, 2011/ Notices

notice will not have a significanteconomic impact on a substantialnumber of small entities. Therefore, weare not preparing an analysis under theRFA.

In addition, section 1102(b) of theSocial Security Act requires us toprepare a regulatory impact analysis if

a rule may have a significant impact onthe operations of a substantial numberof small rural hospitals. This analysismust conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define asmall rural hospital as a hospital that islocated outside of a MetropolitanStatistical Area for Medicare paymentregulations and has fewer than 100

beds. The Secretary has determined thatthis notice will not have a significantimpact on the operations of a substantialnumber of small rural hospitals.Therefore, we are not preparing ananalysis under section 1102(b) of theAct.

Section 202 of the UnfundedMandates Reform Act of 1995 alsorequires that agencies assess anticipatedcosts and benefits before issuing anyrule whose mandates require spendingin any 1 year of $100 million in 1995dollars, updated annually for inflation.In 2011, that threshold is approximately$136 million. This notice will have noconsequential effect on State, local, ortribal governments or on the privatesector. However, States may be requiredto pay the deductibles and coinsurancefor dually-eligible beneficiaries.

Executive Order 13132 establishescertain requirements that an agencymust meet when it promulgates aproposed rule (and subsequent finalrule) that imposes substantial directrequirement costs on State and localgovernments, preempts State law, orotherwise has Federalism implications.This notice will not have a substantialeffect on State or local governments.

In accordance with the provisions of Executive Order 12866, this notice wasreviewed by the Office of Managementand Budget.

(Catalog of Federal Domestic AssistanceProgram No. 93.773, MedicareHospitalInsurance)

Dated: September 22, 2011Donald M. Berwick,Administrator, Centers for Medicare & Medicaid Services.

Dated: October 25, 2011.Kathleen Sebelius,Secretary.[FR Doc. 201128187 Filed 102711; 11:15 am]

BILLING CODE 412001P

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Centers for Medicare & MedicaidServices

[CMS8044N]

RIN 0938AQ15

Medicare Program; Part A Premiumsfor CY 2012 for the Uninsured Agedand for Certain Disabled IndividualsWho Have Exhausted OtherEntitlement

AGENCY : Centers for Medicare &Medicaid Services (CMS), HHS.ACTION : Notice.

SUMMARY : This annual notice announcesMedicares Hospital Insurance (Part A)premium for uninsured enrollees incalendar year (CY) 2012. This premiumis paid by enrollees age 65 and over whoare not otherwise eligible for benefits

under Medicare Part A (hereafter knownas the uninsured aged) and by certaindisabled individuals who haveexhausted other entitlement. Themonthly Part A premium for the 12months beginning January 1, 2012, forthese individuals will be $451. Thereduced premium for certain otherindividuals as described in this noticewill be $248.DATES : Effective Date: This notice iseffective on January 1, 2012.FOR FURTHER INFORMATION CONTACT :Clare McFarland, (410) 7866390.SUPPLEMENTARY INFORMATION :

I. BackgroundSection 1818 of the Social Security

Act (the Act) provides for voluntaryenrollment in the Medicare HospitalInsurance Program (Medicare Part A),subject to payment of a monthlypremium, of certain persons aged 65and older who are uninsured under theOld-Age, Survivors, and DisabilityInsurance (OASDI) program or theRailroad Retirement Act and do nototherwise meet the requirements forentitlement to Medicare Part A. Theseuninsured aged individuals are

uninsured under the OASDI program orthe Railroad Retirement Act, becausethey do not have 40 quarters of coverageunder Title II of the Act (or are/were notmarried to someone who did). (Personsinsured under the OASDI program orthe Railroad Retirement Act and certainothers do not have to pay premiums forMedicare Part A.)

Section 1818A of the Act provides forvoluntary enrollment in Medicare PartA, subject to payment of a monthlypremium for certain disabledindividuals who have exhausted other

entitlement. These are individuals whowere entitled to coverage due to adisabling impairment under section226(b) of the Act, but who are no longerentitled to disability benefits and freeMedicare Part A coverage because theyhave gone back to work and theirearnings exceed the statutorily definedsubstantial gainful activity amount(section 223(d)(4) of the Act).

Section 1818A(d)(2) of the Actspecifies that the provisions relating topremiums under section 1818(d)through section 1818(f) of the Act forthe aged will also apply to certaindisabled individuals as described above.

Section 1818(d) of the Act requires usto estimate, on an average per capita

basis, the amount to be paid from theFederal Hospital Insurance Trust Fundfor services incurred in the followingcalendar year (CY) (including theassociated administrative costs) on

behalf of individuals aged 65 and overwho will be entitled to benefits underMedicare Part A. We must thendetermine, during September of eachyear, the monthly actuarial rate for thefollowing year (the per capita amountestimated above divided by 12) andpublish the dollar amount for themonthly premium in the succeeding CY.If the premium is not a multiple of $1,the premium is rounded to the nearestmultiple of $1 (or, if it is a multiple of 50 cents but not of $1, it is rounded tothe next highest $1).

Section 13508 of the Omnibus BudgetReconciliation Act of 1993 (Pub. L. 103

66) amended section 1818(d) of the Actto provide for a reduction in thepremium amount for certain voluntaryenrollees (section 1818 and section1818A of the Act). The reductionapplies to an individual who is eligibleto buy into the Medicare Part A programand who, as of the last day of theprevious month

Had at least 30 quarters of coverageunder Title II of the Act;

Was married, and had been marriedfor the previous 1-year period, to aperson who had at least 30 quarters of coverage;

Had been married to a person for atleast 1 year at the time of the personsdeath if, at the time of death, the personhad at least 30 quarters of coverage; or

Is divorced from a person and had been married to the person for at least10 years at the time of the divorce if, atthe time of the divorce, the person hadat least 30 quarters of coverage.

Section 1818(d)(4)(A) of the Actspecifies that the premium that theseindividuals will pay for CY 2012 will beequal to the premium for uninsuredaged enrollees reduced by 45 percent.

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67571Federal Register / Vol. 76, No. 211/ Tuesday, November 1, 2011/ Notices

II. Monthly Premium Amount for CY2012

The monthly premium for theuninsured aged and certain disabledindividuals who have exhausted otherentitlement for the 12 months beginning

January 1, 2012, is $451.The monthly premium for those

individuals subject to the 45 percentreduction in the monthly premium is$248.

III. Monthly Premium Rate CalculationAs discussed in section I of this

notice, the monthly Medicare Part Apremium is equal to the estimatedmonthly actuarial rate for CY 2012rounded to the nearest multiple of $1and equals one-twelfth of the averageper capita amount, which is determined

by projecting the number of Part Aenrollees aged 65 years and over as wellas the benefits and administrative coststhat will be incurred on their behalf.

The steps involved in projecting thesefuture costs to the Federal HospitalInsurance Trust Fund are:

Establishing the present cost of services furnished to beneficiaries, bytype of service, to serve as a projection

base; Projecting increases in payment

amounts for each of the service types;and

Projecting increases inadministrative costs.

We base our projections for CY 2012on(1) Current historical data; and (2)projection assumptions derived from

current law and the Mid-Session Reviewof the Presidents Fiscal Year 2012Budget.

We estimate that in CY 2012,40,787,939 people aged 65 years andover will be entitled to benefits (withoutpremium payment) and that they willincur about $220.656 billion in benefitsand related administrative costs. Thus,the estimated monthly average percapita amount is $450.82 and themonthly premium is $451. The fullmonthly premium reduced by 45percent is $248.

IV. Costs to BeneficiariesThe CY 2012 premium of $451 is

approximately 0.22 percent higher thanthe CY 2011 premium of $450.

We estimate that approximately590,000 enrollees will voluntarily enrollin Medicare Part A by paying the fullpremium. We estimate an additional45,000 enrollees will pay the reducedpremium. We estimate that the aggregatecost to enrollees paying these premiumsin CY 2012, compared to the amountthat they paid in CY 2011, will be about$7 million.

V. Waiver of Proposed Notice andComment Period

We use general notices, rather thannotice and comment rulemakingprocedures, to make announcementssuch as this premium notice. In doingso, we acknowledge that, under theAdministrative Procedure Act (APA),

interpretive rules, general statements of policy, and rules of agency organization,procedure, or practice are excepted fromthe requirements of notice and commentrulemaking. The agency may also waivenotice and comment if there is goodcause, as defined by the statute. Weconsidered publishing a proposednotice to provide a period for publiccomment. However, under the APA, wemay waive that procedure if we findgood cause that prior notice andcomment are impracticable,unnecessary, or contrary to the publicinterest.

We are not using notice and commentrulemaking in this notification of Medicare Part A premiums for CY 2011as that procedure is unnecessary

because of the lack of discretion in thestatutory formula that is used tocalculate the premium and the solelyministerial function that this noticeserves. The APA permits agencies towaive notice and comment rulemakingwhen notice and public commentthereon are unnecessary. On this basis,we waive publication of a proposednotice and a solicitation of publiccomments.

VI. Collection of InformationRequirements

This document does not imposeinformation collection andrecordkeeping requirements.Consequently, it need not be reviewed

by the Office of Management andBudget under the authority of thePaperwork Reduction Act of 1995 (44U.S.C. 35).

VII. Regulatory Impact StatementWe have examined the impact of this

notice as required by Executive Order12866 on Regulatory Planning and

Review (September 30, 1993), ExecutiveOrder 13563 on Improving Regulationand Regulatory Review (January 18,2011), the Regulatory Flexibility Act(RFA) (September 19, 1980, Pub. L. 96354), section 1102(b) of the SocialSecurity Act, section 202 of theUnfunded Mandates Reform Act of 1995(March 22, 1995; Pub. L. 1044),Executive Order 13132 on Federalism(August 4, 1999) and the CongressionalReview Act (5 U.S.C. 804(2)).

Executive Orders 12866 and 13563direct agencies to assess all costs and

benefits of available regulatoryalternatives and, if regulation isnecessary, to select regulatoryapproaches that maximize net benefits(including potential economic,environmental, public health and safetyeffects, distributive impacts, andequity). A regulatory impact analysis(RIA) must be prepared for major ruleswith economically significant effects($100 million or more in any 1 year). Asstated in section IV of this notice, weestimate that the overall effect of thesechanges in the Part A premium will bea cost to voluntary enrollees (section1818 and section 1818A of the Act) of about $7 million. Therefore, this noticeis a not a major action as defined inTitle 5, United States Code, section804(2) and is not an economicallysignificant action under Executive Order12866.

The RFA requires agencies to analyzeoptions for regulatory relief of small

entities. For purposes of the RFA, smallentities include small businesses,nonprofit organizations, and smallgovernmental jurisdictions. Mosthospitals and most other providers andsuppliers are small entities, either bynonprofit status or by having revenuesof $7.0 million to $34.5 million in any1 year. Individuals and States are notincluded in the definition of a smallentity. We have determined that thisnotice will not have a significanteconomic impact on a substantialnumber of small entities. Therefore, weare not preparing an analysis under theRFA.

In addition, section 1102(b) of theSocial Security Act requires us toprepare a regulatory impact analysis if a rule may have a significant impact onthe operations of a substantial numberof small rural hospitals. This analysismust conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define asmall rural hospital as a hospital that islocated outside of a MetropolitanStatistical Area for Medicare paymentregulations and has fewer than 100

beds. The Secretary has determined thatthis notice will not have a significant

impact on the operations of a substantialnumber of small rural hospitals.Therefore, we are not preparing ananalysis under section 1102(b) of theAct.

Section 202 of the UnfundedMandates Reform Act of 1995 alsorequires that agencies assess anticipatedcosts and benefits before issuing anyrule whose mandates require spendingin any 1 year of $100 million in 1995dollars, updated annually for inflation.In 2011, that threshold is approximately$136 million. This notice will have no


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67572 Federal Register / Vol. 76, No. 211/ Tuesday, November 1, 2011/ Notices

consequential effect on State, local, ortribal governments or on the privatesector. However, States are required topay the premiums for dually-eligible

beneficiaries.Executive Order 13132 establishes

certain requirements that an agencymust meet when it promulgates aproposed rule (and subsequent finalrule) that imposes substantial directrequirement costs on State and localgovernments, preempts State law, orotherwise has Federalism implications.This notice will not have a substantialeffect on State or local governments.

In accordance with the provisions of Executive Order 12866, this notice wasreviewed by the Office of Managementand Budget.(Catalog of Federal Domestic AssistanceProgram No. 93.773, MedicareHospitalInsurance)

Dated: September 22, 2011.Donald M. Berwick,Administrator, Centers for Medicare & Medicaid Services.

Dated: October 25, 2011.Kathleen Sebelius,Secretary.[FR Doc. 201128188 Filed 102711; 11:15 am]BILLING CODE 412001P

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Centers for Medicare & MedicaidServices

[CMS8045N]

RIN 0938AQ16

Medicare Program; Medicare Part BMonthly Actuarial Rates, PremiumRate, and Annual DeductibleBeginning January 1, 2012AGENCY : Centers for Medicare &Medicaid Services (CMS), HHS.ACTION : Notice.SUMMARY : This notice announces themonthly actuarial rates for aged (age 65and over) and disabled (under age 65)

beneficiaries enrolled in Part B of the

Medicare Supplementary MedicalInsurance (SMI) program beginning January 1, 2012. In addition, this noticeannounces the monthly premium foraged and disabled beneficiaries as wellas the income-related monthlyadjustment amounts to be paid by

beneficiaries with modified adjustedgross income above certain thresholdamounts. The monthly actuarial ratesfor 2012 are $199.80 for aged enrolleesand $192.50 for disabled enrollees. Thestandard monthly Part B premium ratefor 2012 is $99.90, which is equal to 50

percent of the monthly actuarial rate foraged enrollees or approximately 25percent of the expected average totalcost of Part B coverage for agedenrollees. (The 2011 standard premiumrate was $115.40) The Part B deductiblefor 2012 is $140.00 for all Part B

beneficiaries. If a beneficiary has to payan income-related monthly adjustment,they may have to pay a total monthlypremium of about 35, 50, 65, or 80percent of the total cost of Part Bcoverage.DATES : Effective Date: January 1, 2012.FOR FURTHER INFORMATION CONTACT : M.Kent Clemens, (410) 7866391.SUPPLEMENTARY INFORMATION :

I. Background

Part B is the voluntary portion of theMedicare program that pays all or partof the costs for physicians services,outpatient hospital services, certain

home health services, services furnished by rural health clinics, ambulatorysurgical centers, comprehensiveoutpatient rehabilitation facilities, andcertain other medical and healthservices not covered by Medicare PartA, Hospital Insurance. Medicare Part Bis available to individuals who areentitled to Medicare Part A, as well asto U.S. residents who have attained age65 and are citizens, and aliens who werelawfully admitted for permanentresidence and have resided in theUnited States for 5 consecutive years.Part B requires enrollment and payment

of monthly premiums, as described in42 CFR part 407, subpart B, and part408, respectively. The difference

between the premiums paid by allenrollees and total incurred costs is met

by transfers from the general fund of theTreasury.

The Secretary of the Department of Health and Human Services (theSecretary) is required by section 1839 of the Social Security Act (the Act) toannounce the Part B monthly actuarialrates for aged and disabled beneficiariesas well as the monthly Part B premium.The Part B annual deductible isincluded because its determination isdirectly linked to the aged actuarial rate.

The monthly actuarial rates for agedand disabled enrollees are used todetermine the correct amount of generalrevenue financing per beneficiary eachmonth. These amounts, according toactuarial estimates, will equal,respectively, one-half of the expectedaverage monthly cost of Part B for eachaged enrollee (age 65 or over) and one-half of the expected average monthlycost of Part B for each disabled enrollee(under age 65).

The Part B deductible to be paid byenrollees is also announced. Prior to theMedicare Prescription Drug,Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108173), the PartB deductible was set in statute. Aftersetting the 2005 deductible amount at$110.00, section 629 of the MMA(amending section 1833(b) of the Act)requires that the Part B deductible beindexed beginning in 2006. Theinflation factor to be used each year isthe annual percentage increase in thePart B actuarial rate for enrollees age 65and over. Specifically, the 2012 Part Bdeductible is calculated by multiplyingthe 2011 deductible by the ratio of the2012 aged actuarial rate over the 2011aged actuarial rate. The amountdetermined under this formula is thenrounded to the nearest $1.

The monthly Part B premium rate to be paid by aged and disabled enrolleesis also announced. (Although the costs

to the program per disabled enrollee aredifferent than for the aged, the statuteprovides that they pay the samepremium amount.) Beginning with thepassage of section 203 of the SocialSecurity Amendments of 1972 (Pub. L.92603), the premium rate, which wasdetermined on a fiscal year basis, waslimited to the lesser of the actuarial ratefor aged enrollees, or the currentmonthly premium rate increased by thesame percentage as the most recentgeneral increase in monthly Title IIsocial security benefits.

However, the passage of section 124of the Tax Equity and FiscalResponsibility Act of 1982 (TEFRA)(Pub. L. 97248) suspended thispremium determination process.Section 124 of TEFRA changed thepremium basis to 50 percent of themonthly actuarial rate for aged enrollees(that is, 25 percent of program costs foraged enrollees). Section 606 of theSocial Security Amendments of 1983(Pub. L. 9821), section 2302 of theDeficit Reduction Act of 1984 (DEFRA84) (Pub. L. 98369), section 9313 of theConsolidated Omnibus BudgetReconciliation Act of 1985 (COBRA 85)(Pub. L. 99272), section 4080 of the

Omnibus Budget Reconciliation Act of 1987 (OBRA 87) (Pub. L. 100203), andsection 6301 of the Omnibus BudgetReconciliation Act of 1989 (OBRA 89)(Pub. L. 101239) extended theprovision that the premium be based on50 percent of the monthly actuarial ratefor aged enrollees (that is, 25 percent of program costs for aged enrollees). Thisextension expired at the end of 1990.

The premium rate for 1991 through1995 was legislated by section1839(e)(1)(B) of the Act, as added bysection 4301 of the Omnibus Budget


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2012 Medicare Part a Premiums for Uninsured, Aged and Disabled Who Have Exhausted Other Entitlements