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[Federal Register Volume 89, Number 220 (Thursday, November 14, 2024)]
[Notices]
[Pages 90015-90018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26473]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-8087-N]
RIN 0938-AV37

Medicare Program; CY 2025 Part A Premiums for the Uninsured Aged 
and for Certain Disabled Individuals Who Have Exhausted Other 
Entitlement

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

ACTION: Notice of 2025 Medicare Part A premium for uninsured enrollees.

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SUMMARY: This notice announces Medicare's Hospital Insurance Program 
(Medicare Part A) premium for uninsured enrollees in calendar year (CY) 
2025. This premium is paid by enrollees aged 65 and over who are not 
otherwise eligible for benefits under Medicare Part A (hereafter known 
as the ``uninsured aged'') and by certain individuals with disabilities 
who have exhausted other entitlement. The monthly Medicare Part A 
premium for the 12 months beginning January 1, 2025, for these 
individuals will be $518. The premium for certain other individuals as 
described in this notice will be $285.

DATES: The premium announced in this notice is effective on January 1, 
2025.

FOR FURTHER INFORMATION CONTACT: Yaminee Thaker, (410) 786-7921.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 1818 of the Social Security Act (the Act) provides for 
voluntary enrollment in Medicare Part A, subject to payment of a 
monthly premium, of certain persons aged 65 and older who are uninsured 
under the Old-Age, Survivors, and Disability Insurance (OASDI) program 
or the Railroad Retirement Act and do not otherwise meet the 
requirements for entitlement to Medicare Part A. These ``uninsured 
aged'' individuals are uninsured under the OASDI program or the 
Railroad Retirement Act, because they do not have 40 quarters of 
coverage under Title II of the Act (or are/were not married to someone 
who did). (Persons insured under the OASDI program or the Railroad 
Retirement Act and certain others do not have to pay premiums for 
Medicare Part A.)
    Section 1818A of the Act provides for voluntary enrollment in 
Medicare Part A, subject to payment of a monthly premium for certain 
individuals with disabilities who have exhausted other entitlement. 
These are individuals who were entitled to coverage due to a disabling 
impairment under section 226(b) of the Act, but who are no longer 
entitled to disability benefits and premium-free Medicare Part A 
coverage because they have gone back to work and their earnings exceed 
the statutorily defined ``substantial gainful activity'' amount 
(section 223(d)(4) of the Act).
    Section 1818A(d)(2) of the Act specifies that the provisions 
relating to premiums for the aged under section 1818(d) through section 
1818(f) of the Act will also apply to certain individuals with 
disabilities as described above.
    Section 1818(d)(1) 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 incurred in the upcoming 
calendar year (CY) (including the associated administrative costs) on 
behalf of individuals aged 65 and over who will be entitled to benefits 
under Medicare Part A. We must then determine the monthly actuarial 
rate for the following year (the per capita amount estimated above 
divided by 12) and publish the dollar amount for the monthly premium in 
the succeeding CY. 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).
    Section 13508 of the Omnibus Budget Reconciliation Act of 1993 
(Pub. L. 103-66) amended section 1818(d) of the Act to provide for a 
reduction in the premium amount for certain voluntary enrollees 
(sections 1818 and 1818A of the Act). The reduction applies to an 
individual who is eligible to buy into the Medicare Part A program and 
who, as of the last day of the previous month:
     Had at least 30 quarters of coverage under Title II of the 
Act;
     Was married, and had been married for the previous 1-year 
period, to a person who had at least 30 quarters of coverage;
     Had been married to a person for at least 1 year at the 
time of the person's death if, at the time of death, the person had at 
least 30 quarters of coverage; or
     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.
    Section 1818(d)(4)(A) of the Act specifies that the premium that 
these individuals will pay for CY 2025 will be equal to the premium for 
uninsured aged enrollees reduced by 45 percent.
    Section 1818(g) of the Act requires the Secretary of the Department 
of Health and Human Services (the Secretary), at the request of a 
state, to enter into a Medicare Part A buy-in agreement with a state to 
pay Medicare Part A premiums for Qualified Medicare Beneficiaries 
(QMBs). Under the QMB program, state Medicaid agencies must pay the 
Medicare Part A premium for those not eligible for premium-free 
Medicare Part A if those individuals meet all of the eligibility 
requirements for the QMB program under the state's Medicaid state plan. 
(Entering into a Medicare Part A buy-in agreement would permit a state 
to avoid any Medicare Part A late enrollment penalties that the 
individual may owe and would allow states to enroll persons in Medicare 
Part A at any time of the year, without regard to Medicare enrollment 
periods.) Other individuals may be eligible for the Qualified Disabled 
Working Individuals program, through which state Medicaid programs 
provide coverage of Medicare Part A premiums for individuals eligible 
to enroll in Medicare Part A by virtue of section 1818A of the Act who 
meet certain financial eligibility criteria.

II. Monthly Premium Amount for CY 2025

    The monthly premium for the uninsured aged and certain individuals 
with disabilities who have exhausted other entitlement for the 12 
months beginning January 1, 2025, is $518. The monthly premium for the 
individuals eligible under section 1818(d)(4)(B) of the Act, and 
therefore, subject to the 45

[[Page 90016]]

percent reduction in the monthly premium, is $285.

III. Monthly Premium Rate Calculation

    As discussed in section I of this notice, the monthly Medicare Part 
A premium is equal to the estimated monthly actuarial rate for CY 2025 
rounded to the nearest multiple of $1 and equals one-twelfth of the 
average per capita amount, which is determined by projecting the number 
of Medicare Part A enrollees aged 65 years and over, as well as the 
benefits and administrative costs that will be incurred on their 
behalf.
    The steps involved in projecting these future costs to the Federal 
Hospital Insurance Trust Fund are:
     Establishing the present cost of services furnished to 
beneficiaries, by type of service, to serve as a projection base;
     Projecting increases in payment amounts for each of the 
service types; and
     Projecting increases in administrative costs.
    We base our projections for CY 2025 on--(1) current historical 
data; and (2) projection assumptions derived from current law and the 
President's Fiscal Year 2025 Budget.
    For CY 2025, we estimate that 61,199,491 people aged 65 years and 
over will be entitled to (enrolled in) benefits (without premium 
payment) and that they will incur about $380.149 billion in benefits 
and related administrative costs. Thus, the estimated monthly average 
per capita amount is $517.64 and the monthly premium is $518. 
Subsequently, the full monthly premium reduced by 45 percent is $285.

IV. Costs to Beneficiaries

    The CY 2025 monthly premium of $518 is approximately 2.6 percent 
higher than the CY 2024 premium of $505. We estimate that approximately 
756,000 enrollees will voluntarily enroll in Medicare Part A by paying 
the full premium. We estimate that over 90 percent of these individuals 
will have their Medicare Part A premium paid for by states, since they 
are enrolled in the QMB program. Furthermore, the CY 2025 reduced 
monthly premium of $285 is approximately 2.5 percent higher than the CY 
2024 premium of $278. We estimate that an additional 97,000 enrollees 
will pay the reduced premium. Therefore, we estimate that the total 
aggregate cost to enrollees paying these premiums in CY 2025, compared 
to the amount that they paid in CY 2024, will be about $126 million.

V. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment prior to a rule taking 
effect in accordance with section 1871 of the Act and section 553(b) of 
the Administrative Procedure Act (APA). Section 1871(a)(2) of the Act 
provides that no rule, requirement, or other statement of policy (other 
than a national coverage determination) that establishes or changes a 
substantive legal standard governing the scope of benefits, the payment 
for services, or the eligibility of individuals, entities, or 
organizations to furnish or receive services or benefits under Medicare 
shall take effect unless it is promulgated through notice and comment 
rulemaking. Unless there is a statutory exception, section 1871(b)(1) 
of the Act generally requires the Secretary to provide for notice of a 
proposed rule in the Federal Register and provide a period of not less 
than 60 days for public comment before establishing or changing a 
substantive legal standard regarding the matters enumerated by the 
statute. Similarly, under 5 U.S.C. 553(b) of the APA, the agency is 
required to publish a notice of proposed rulemaking in the Federal 
Register before a substantive rule takes effect. Section 553(d) of the 
APA and section 1871(e)(1)(B)(i) of the Act usually require a 30-day 
delay in effective date after issuance or publication of a rule, 
subject to exceptions. Sections 553(b)(B) and 553(d)(3) of the APA 
provide for exceptions from the advance notice and comment requirement 
and the delay in effective date requirements. Sections 1871(b)(2)(C) 
and 1871(e)(1)(B)(ii) of the Act also provide exceptions from the 
notice and 60-day comment period and the 30-day delay in effective 
date. Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act 
expressly authorize an agency to dispense with notice and comment 
rulemaking for good cause if the agency makes a finding that notice and 
comment procedures are impracticable, unnecessary, or contrary to the 
public interest.
    The annual Medicare Part A premium announcement set forth in this 
notice does not establish or change a substantive legal standard 
regarding the matters enumerated by the statute or constitute a 
substantive rule which would be subject to the notice requirements in 
section 553(b) of the APA. However, to the extent that an opportunity 
for public notice and comment could be construed as required for this 
notice, we find good cause to waive this requirement. Section 1818(d) 
of the Act requires the Secretary during September of each year to 
determine and publish the amount to be paid, on an average per capita 
basis, from the Federal Hospital Insurance Trust Fund for services 
incurred in the impending CY (including the associated administrative 
costs) on behalf of individuals aged 65 and over who will be entitled 
to benefits under Medicare Part A. Further, the statute requires that 
the agency determine the applicable premium amount for each CY in 
accordance with the statutory formula, and we are simply notifying the 
public of the changes to the Medicare Part A premiums for CY 2025. We 
have calculated the Medicare Part A premiums as directed by the 
statute; the statute establishes both when the premium amounts must be 
published and the information that the Secretary must factor into the 
premium amounts, so we do not have any discretion in that regard. We 
find notice and comment procedures to be unnecessary for this notice 
and we find good cause to waive such procedures under section 553(b)(B) 
of the APA and section 1871(b)(2)(C) of the Act, if such procedures may 
be construed to be required at all. Through this notice, we are simply 
notifying the public of the updates to the Medicare Part A premiums, in 
accordance with the statute, for CY 2025. As such, we also note that 
even if notice and comment procedures were required for this notice, 
for the reasons stated above, we would find good cause to waive the 
delay in effective date of the notice, as additional delay would be 
contrary to the public interest under section 1871(e)(1)(B)(ii) of the 
Act. Publication of this notice is consistent with section 1818(d) of 
the Act, and we believe that any potential delay in the effective date 
of the notice, if such delay were required at all, could cause 
unnecessary confusion both for the agency and Medicare beneficiaries.

VI. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

VII. Regulatory Impact Analysis

    Although this notice does not constitute a significant regulatory 
action (defined below), we nevertheless prepared this Regulatory Impact

[[Page 90017]]

Analysis (RIA) section in the interest of ensuring that the impacts of 
this notice are fully understood.

A. Statement of Need

    This notice announces the CY 2025 Medicare Part A premiums for the 
uninsured aged and for certain disabled individuals who have exhausted 
other entitlement, as required by sections 1818 and 1818A of the Act. 
It also responds to section 1818(d) of the Act, which requires the 
Secretary to provide for publication of these amounts in the Federal 
Register during the September that precedes the start of each CY. As 
this statutory provision prescribes a detailed methodology for 
calculating these amounts, we do not have the discretion to adopt an 
alternative approach on these issues.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), Executive Order 14094 titled ``Modernizing 
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the 
Social Security Act, section 202 of the Unfunded Mandates Reform Act of 
1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on 
Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 
804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
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 
Executive Order 14094 titled ``Modernizing Regulatory Review'' amends 
section 3(f)(1) of Executive Order 12866 (Regulatory Planning and 
Review). The amended section 3(f) of Executive Order 12866 defines a 
``significant regulatory action'' as an action that is likely to result 
in a rule that may: (1) have an annual effect on the economy of $200 
million or more, (adjusted every 3 years by the Administrator of OMB's 
Office of Information and Regulatory Affairs (OIRA) for changes in 
gross domestic product); or adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, territorial, or 
tribal governments or communities; (2) create a serious inconsistency 
or otherwise interfere with an action taken or planned by another 
agency; (3) materially alter the budgetary impacts of entitlement 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or (4) raise legal or policy issues for which 
centralized review would meaningfully further the President's 
priorities or the principles set forth in this Executive order, as 
specifically authorized in a timely manner by OIRA in each case.
    A regulatory impact analysis (RIA) must be prepared for rules with 
significant regulatory action(s) as per section 3(f)(1) of Executive 
Order 12866 ($200 million or more in any one year). Based on our 
estimates, OIRA has determined that this notice is not significant per 
section 3(f)(1) of E.O. 12866 as measured by the $200 million or more 
impact in any one year.
    In accordance with the Congressional Review Act, OIRA has 
determined that this notice meets the criteria set forth in 5 U.S.C. 
804(2). Accordingly, we have prepared an RIA that to the best of our 
ability presents the costs and benefits of this notice.
    As stated in section IV. of this notice, we estimate that the 
overall effect of the changes in the Medicare Part A premium will be a 
cost to voluntary enrollees (sections 1818 and 1818A of the Act) of 
about $126 million.

C. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), in the table 1, we have prepared an accounting 
statement showing the total aggregate cost to enrollees paying premiums 
in CY 2025, compared to the amount that they paid in CY 2024. This 
amount is approximately $126 million. As stated in section IV. of this 
notice, the CY 2025 premium of $518 is approximately 2.6 percent higher 
than the CY 2024 premium of $505. We estimate that approximately 
756,000 enrollees will voluntarily enroll in Medicare Part A by paying 
the full premium. We estimate that over 90 percent of these individuals 
will have their Medicare Part A premium paid for by states, since they 
are enrolled in the QMB program. Furthermore, the CY 2025 reduced 
premium of $285 is approximately 2.5 percent higher than the CY 2024 
premium of $278.

    Table 1--Estimated Transfers for CY 2025 Medicare Part A Premiums
------------------------------------------------------------------------
                                                                 Period
              Category                       Transfers          covered
------------------------------------------------------------------------
Annualized Monetized Transfers......  $126 million...........       2025
From Whom to Whom...................  Beneficiaries to         .........
                                       Federal Government.
------------------------------------------------------------------------

D. Regulatory Flexibility Act

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most hospitals and most other providers and 
suppliers are small entities, either by being nonprofit organizations 
or by meeting the Small Business Administration's (SBA) definition of a 
small business (having revenues of less than $9.0 million to $47 
million in any 1 year). Individuals and states are not included in the 
definition of a small entity. This annual notice announces the Medicare 
Part A premiums for CY 2025 and will have an impact on certain Medicare 
beneficiaries, but not on small entities as defined by the SBA. As a 
result, we are not preparing an analysis for the RFA because the 
Secretary has certified that this notice will not have a significant 
economic impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a metropolitan statistical area and has fewer 
than 100 beds. This annual notice announces the Medicare Part A 
premiums for CY 2025 and will have an impact on certain Medicare 
beneficiaries. As a result, we are not preparing an analysis for 
section 1102(b) of the Act, because the Secretary has certified that 
this notice will not have a significant impact on the operations of a 
substantial number of small rural hospitals.

E. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any

[[Page 90018]]

rule whose mandates require spending in any 1 year of $100 million in 
1995 dollars, updated annually for inflation. In 2024, that threshold 
is approximately $183 million. This notice would not impose a mandate 
that will result in the expenditure by state, local, and Tribal 
Governments, in the aggregate, or by the private sector, of more than 
$183 million in any 1 year.

F. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has federalism 
implications. This notice will not have a substantial direct effect on 
state or local governments, preempt state law, or otherwise have 
federalism implications.

G. Congressional Review

    This notice is subject to the Congressional Review Act and has been 
transmitted to the Congress and the Government Accountability Office's 
Comptroller General for review.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October 31, 2024.

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-26473 Filed 11-8-24; 4:15 pm]
BILLING CODE 4120-01-P
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