[Federal Register Volume 65, Number 203 (Thursday, October 19, 2000)]
[Notices]
[Pages 62733-62735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26847]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-8008-N]
RIN 0938-AK34


Medicare Program; Part A Premium for 2001 for the Uninsured Aged 
and for Certain Disabled Individuals Who Have Exhausted Other 
Entitlement

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the hospital insurance premium for 
calendar year 2001 under Medicare's hospital insurance program (Part A) 
for the uninsured aged and for certain disabled individuals who have 
exhausted other entitlement. The monthly Medicare Part A premium for 
the 12 months beginning January 1, 2001 for these individuals is $300. 
The reduced premium for certain other individuals as described in this 
notice is $165. Section 1818(d) of the Social Security Act specifies 
the method to be used to determine these amounts.

EFFECTIVE DATE: This notice is effective on January 1, 2001.

FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390.

SUPPLEMENTARY INFORMATION:   

I. Background

    Section 1818 of the Social Security Act (the Act) provides for 
voluntary enrollment in the Medicare hospital insurance program 
(Medicare Part A), subject to payment of a monthly premium, of certain 
persons aged 65 and older, who are uninsured for social security or 
railroad retirement benefits and do not otherwise meet the requirements 
for entitlement to Medicare Part A. (Persons insured under the Social 
Security or Railroad Retirement Acts need not pay premiums for hospital 
insurance.)
    Section 1818(d) of the Act requires us to estimate, on an average 
per capita basis, the amount to be paid from the Federal Hospital 
Insurance Trust Fund for services performed, and related administrative 
costs incurred, in the following calendar year with respect to 
individuals aged 65 and over who will be entitled to benefits under 
Medicare Part A. We must then, during September of each year, determine 
the monthly actuarial rate (the per capita amount estimated above 
divided by 12) and publish the dollar amount for the monthly premium in 
the succeeding calendar year. If the premium is not a multiple of $1, 
the premium is rounded to the nearest multiple of $1 (or, if it is a 
multiple of 50 cents but not of $1, it is rounded to the next highest 
$1). The 2000 premium under this method was $301 and was effective 
January 1, 2000. (See 64 FR 57110, October 22, 1999.)
    Section 1818(d)(2) of the Act requires us to determine and publish, 
during September of each calendar year, the amount of the monthly 
premium for the following calendar year for persons who voluntarily 
enroll in Medicare Part A.
    Section 1818A of the Act provides for voluntary enrollment in 
Medicare Part A, subject to payment of a monthly premium, of certain 
disabled individuals who have exhausted other entitlement. These 
individuals are those not now entitled but who have been entitled under 
section 226(b) of the Act, who continue to have the disabling 
impairment upon which their entitlement was based, and whose 
entitlement ended solely because they had earnings that exceeded the 
substantial gainful activity amount (as defined in section 223(d)(4) of 
the Act).
    Section 1818A(d)(2) of the Act specifies that the provisions 
relating to premiums under section 1818(d) through (f) of the Act for 
the aged will also apply to certain disabled individuals as described 
above. Therefore, the premium amounts applicable to the aged, as 
announced in this notice, also apply to these certain disabled 
individuals.
    Section 13508 of the Omnibus Budget Reconciliation Act of 1993 
(Public Law 103-66) amended section 1818(d) of the Act to provide for a 
reduction in the monthly premium amount for certain voluntary 
enrollees. The reduction applies for an individual who is not eligible 
for social security or railroad retirement benefits but who, with 
respect to a month, as of the last day of the previous month--
    <bullet> Had at least 30 quarters of coverage under title II of the 
Act;
    <bullet> Was married and had been married for the previous 1-year 
period to a person who had at least 30 quarters of coverage;
    <bullet> Had been married to a person for at least 1 year at the 
time of the person's

[[Page 62734]]

death if at such time the person had at least 30 quarters of coverage; 
or
    <bullet> Is divorced from a person and had been married to the 
person for at least 10 years at the time of the divorce, if at the time 
of the divorce, the person had at least 30 quarters of coverage.
    For calendar year 2001, section 1818(d)(4)(A) of the Act specifies 
that the monthly premium that these individuals will pay for calendar 
year 2001 will be equal to the monthly premium for aged voluntary 
enrollees reduced by 45 percent.

II. Premium Amount for 2001

    Under the authority of sections 1818(d)(2) and 1818A(d)(2) of the 
Act, the Secretary has determined that the monthly Medicare Part A 
hospital insurance premium for the uninsured aged and for certain 
disabled individuals who have exhausted other entitlement for the 12 
months beginning January 1, 2001 is $300.
    The monthly premium for those individuals subject to a 45 percent 
reduction in the monthly premium for the 12-month period beginning 
January 1, 2001 is $165.

III. Statement of Actuarial Assumptions and Bases Employed in 
Determining the Monthly Premium Rate

    As discussed in section I of this notice, the monthly Medicare Part 
A premium for 2001 is equal to the estimated monthly actuarial rate for 
2001 rounded to the nearest multiple of $1. The monthly actuarial rate 
is defined to be one-twelfth of the average per capita amount that the 
Secretary estimates will be paid from the Federal Hospital Insurance 
Trust Fund for services performed and related administrative costs 
incurred in 2001 for individuals aged 65 and over who will be entitled 
to benefits under the hospital insurance program during 2001. Thus, the 
number of individuals aged 65 and over who will be entitled to hospital 
insurance benefits and the costs incurred on behalf of these 
beneficiaries must be projected to determine the premium rate.
    The principal steps involved in projecting the future costs of the 
hospital insurance program are (a) establishing the present cost of 
services furnished to beneficiaries, by type of service, to serve as a 
projection base; (b) projecting increases in payment amounts for each 
of the various service types; and (c) projecting increases in 
administrative costs. Establishing historical Medicare Part A 
enrollment and projecting future enrollment, by type of beneficiary, is 
part of this process.
    We have completed all of the above steps, basing our projections 
for 2001 on (a) current historical data and (b) projection assumptions 
under current law from the Midsession Review of the President's Fiscal 
Year 2001 Budget. It is estimated that in calendar year 2001, 33.809 
million people aged 65 and over will be entitled to Medicare Part A 
benefits (without premium payment), and that these individuals will, in 
2001, incur $121.835 billion of benefits for services performed and 
related administrative costs. Thus, the estimated monthly average per 
capita amount is $300.30 and the monthly premium is $300. The monthly 
premium for those individuals eligible to pay this premium reduced by 
45 percent is $165.

IV. Costs to Beneficiaries

    The 2001 Medicare Part A premium of $300 is about 0.3 percent lower 
than the 2000 premium of $301.
    We estimate that there will be, in calendar year 2001, 
approximately 382,000 enrollees who do not otherwise meet the 
requirements for entitlement, and will voluntarily enroll in Medicare 
Part A by paying the full premium. We estimate an additional 6,000 
enrollees will be paying the reduced premium. The estimated overall 
effect of the changes in the premium will be a savings to these 
voluntary enrollees of about $5 million.

V. Waiver of Notice of Proposed Rulemaking

    The Medicare statute, as discussed previously, requires publication 
of the Medicare Part A hospital insurance premium for the upcoming 
calendar year during September of each year. The amounts are determined 
according to the statute. As has been our custom, we use general 
notices, rather than formal notice and comment rulemaking procedures, 
to make the announcements. In doing so, we acknowledge that, under the 
Administrative Procedure Act, interpretive rules, general statements of 
policy, and rules of agency organization, procedure, or practice are 
excepted from the requirements of notice and comment rulemaking.
    We considered publishing a proposed notice to provide a period for 
public comment. However, we may waive that procedure if we find good 
cause that prior notice and comment are impracticable, unnecessary, or 
contrary to the public interest. We find that the procedure for notice 
and comment is unnecessary because the formula used to calculate the 
Part A hospital insurance premium is statutorily directed, and we can 
exercise no discretion in following that formula. Moreover, the statute 
established the time period for which the premium will apply and 
delaying publication of the premium amount would be contrary to the 
public interest. Therefore, we find good cause to waive publication of 
a proposed notice and solicitation of public comments.

VI. Regulatory Impact Statement

    We have examined the impacts of this notice as required by 
Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Public 
Law 96-354). Executive Order 12866 directs agencies to assess all costs 
and benefits of available regulatory alternatives and, when regulation 
is necessary, to select regulatory approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety effects; distributive impacts; and equity). The RFA requires 
agencies to analyze options for regulatory relief for small entities. 
For purposes of the RFA, States and individuals are not considered 
small entities.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis for any notice that may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
604 of the RFA. For purposes of section 1102(b) of the Act, we consider 
a small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 50 beds.
    As stated previously in section IV, the estimated overall effect of 
the changes in the premium will be a savings to voluntary enrollees of 
about $5 million. Therefore, this notice is not a major rule as defined 
in Title 5, United States Code Annotated, section 804(2) and is not an 
economically significant regulatory action under Executive Order 12866.
    Therefore, we have determined, and the Secretary certifies, that 
this notice will not result in a significant impact on a substantial 
number of small entities and will not have a significant impact on the 
operations of a substantial number of small rural hospitals. Therefore, 
we are not preparing analyses for either the RFA or section 1102(b) of 
the Act.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.
    We have reviewed this notice under the threshold criteria of 
Executive Order 13132, Federalism. We have determined that it does not 
significantly affect the

[[Page 62735]]

rights, roles, and responsibilities of States.

    Authority: Sections 1818(d)(2) and 1818A(d)(2) of the Social 
Security Act (42 U.S.C. 1395i-2(d)(2) and 1395i-2a(d)(2)).

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance)

    Dated: September 25, 2000.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Dated: September 26, 2000.
Donna E. Shalala,
Secretary.
[FR Doc. 00-26847 Filed 10-18-00; 8:45 am]
BILLING CODE 4120-01-P