Social Insurance and Public Assistance

790 Series Bf535–544 Bf SOCIAL INSURANCE AND PUBLIC ASSISTANCE
TABLE Bf535–544 Medicare cost sharing and premium amounts: 1966–1999 Continued
Individuals who are eligible for Social Security or Railroad Retirement
benefits are eligible for premium-free HI when they reach age 65. Workers
and their spouses with a sufficient period of Medicare-only coverage in federal,
state, or local government employment are also eligible at age 65. HI
is also provided to disabled beneficiaries who have been entitled to Social
Security or Railroad Retirement disability benefits for at least twenty-four
months, and government employees with Medicare-only coverage who have
been disabled for more than twenty-nine months. Insured workers and their
spouses and children who have end-stage renal disease and who require kidney
dialysis or a kidney transplant are eligible regardless of age.
Since July 1973, most persons age 65 or older and otherwise ineligible
for HIhave been permitted to enroll voluntarily and pay the monthly premium
for HI if they also enroll in SMI. Beginning in 1993, Omnibus Budget
Reconciliation legislation stipulated that individuals and their spouses with
at least thirty quarters of Social Security coverage were eligible for a reduced
premium over the period 1994–1997. The reduced premiums for each year
in this period were $184, $183, $188, and $187, respectively.
Financing for the HI program is provided through a tax on earnings that
is separate from the tax used to finance Old-Age, Survivors, and Disability
Insurance (OASDI) benefits. Prior to January 1991, the OASDI and HI
taxes were applied to the same maximum earnings base. Since that time, the
earnings base for HI has increased; the Omnibus Budget Reconciliation Act
of 1993 repealed the dollar limit and wages and self-employment income
subject to HI taxes. The HI contribution rate of 1.45 percent applies equally
to employers and employees, and the rate for the self-employed equals the
combined rate of 2.9 percent. Income from contributions is channeled into
the federal HI trust fund, from which HI benefits and administrative costs
are paid. After 1977, the Health Care Financing Administration (HCFA) assumed
responsibility for administering the program from the Social Security
Administration.
The SMI program covers medically necessary services and supplies such
as the following: (1) physician’s, surgeon’s, and some Medicare-approved
practitioners’ services; (2) services in an emergency room or outpatient clinic;
(3) laboratory tests, X-rays, and other radiology services; (4) mental health
care in a partial hospitalization psychiatric program; (5) ambulatory surgical
center services; (6) physical and occupational therapy, and speech pathology
services; (7) comprehensive outpatient rehabilitation facility services,
and certain treatments of a mental illness; (8) radiation therapy, renal (kidney)
dialysis and transplants, and heart and liver transplant under certain
limited conditions; (9) approved durable medical equipment for home use;
and (10) certain drugs and biologicals.
Cost-sharing contributions are required for participants in SMI. Beneficiaries
must pay the following: an annual deductible, series Bf540; coinsurance
payments as a percentage of the bill, series Bf541; charges above the
Medicare allowed charge; and charges for services that are not covered by
Medicare. Noncovered services include routine physical examinations, longterm
nursing care, and certain other health care needs such as eyeglasses. In
addition, the insured pays a monthly premium, series Bf542. The government
then pays a supplemental premium for the aged and, since July 1973, for the
disabled, series Bf543–544.
Except for aliens, all persons age 65 and older and all disabled persons
entitled to coverage under HI are eligible to enroll in the SMI program on a
voluntary basis by paying a monthly premium. Premiums are channeled into
the federal SMI trust fund, and the program is administered by HCFA.
Series Bf540–541. Beginning in April 1968, professional inpatient services
of pathologists and radiologists were not subject to either a deductible or
coinsurance for SMI. However, after 1980, the pathologists’ and radiologists’
services were not subject to a deductible or coinsurance only as long as the
physician accepted assignment (agreed to accept Medicare’s determination
of “reasonable charges” as the full fee for the service). Effective in October
1982, these services once again became subject to coinsurance. In 1973 only,
home health services were not subject to coinsurance under SMI. In 1981
only, home health services were not subject to a deductible.
Series Bf542. In 1973, the monthly premium for SMI for the enrollee was
reduced temporarily to $5.80 in July and $6.10 in August by the Cost of Living
Council. For 1989, the monthly premium reported in the table includes
the standard monthly SMI premium and a supplemental monthly flat premium
under the Medicare Catastrophic Coverage Act of 1988. The amount
shown is for most Part B enrollees. Residents of Puerto Rico and other territories
and commonwealths, as well as other persons enrolled in Part B only,
paid different supplemental flat premiums, so that the amount shown in
the table is larger than the amount paid by these individuals. The Omnibus
Budget Reconciliation Act of 1989 revised the methodology for determining
the 1990 SMI premium for enrollees. Before the revision, the rate would have
been $29.
Series Bf542–543. The monthly premium for SMI for both the enrollee and
the government did not change to $4 until April 1968.