Government officials have said that Medicare premiums and other out of pocket costs for medical, will not rise next year. Premiums rise every year to meet the higher costs for the coming year and these have been rising more quickly than overall inflation over the years. Though such increases will happen next year too they will be offset by adding in the reserves in Medicare Part B funds. Kerry Weems, the administrator of the Centers for Medicare and Medicaid Services said, "There's good news in the numbers."

Unexpected surplus in the federal account is the reason for this, said officials explaining that the reserve gained $9.3 billion after officials discovered money was inadvertently being drawn from Medicare Part B to cover hospice benefits.

Premiums for Part B which covers doctor visits, outpatient services, the purchase of certain medical equipment, such as wheelchairs and oxygen machines, medical equipment, and other services, would stay steady at $ 96.40 a month next year too, announced Medicare. This is the same rate that is currently paid by seniors and disabled beneficiaries. Part B’s deductible will also remain at $135 per year. This is the one time amount that seniors pay before the benefits start. Part B premiums, by law, constitute one quarter of the total program cost every year.

Richard Foster, chief actuary at the Centers for Medicare and Medicaid Services said this is the sixth time in the 40 plus year history of the Medicare program and the first since 2000 that the premiums have not gone up.  "This is largely a one-time adjustment. In the future, we're going to have to go back to raising the premiums to match the increase in expenditures," he said.

Most beneficiaries do not pay premiums for hospital coverage and out of pocket deductibles for hospital visits as well as nursing home care would increase by $44 in 2009 to $1068 said Weems.

Officials feel that this would be the fifth time since 1976 that premiums did not go up and of the 44 million people in Medicare; about 5 % are subject to a higher premium based on their income. This was as part of a bill establishing a new drug benefit, that Congress approved higher premiums for wealthier beneficiaries aimed at individuals earning more than $85,000 and couples earning more than $170,000. The premium amounts would range between $134.90 to $308.30, depending upon the participant's income.

Nancy LeaMond, an executive vice president at AARP said, "The average 73-year-old in Medicare has seen his or her premium double since joining the program. Americans old and young continue to struggle with skyrocketing health care costs. And the weakening economy is only making it harder for people — especially retirees on fixed incomes — to pay their health care bills."

Medicare is expected to cost more than $ 500 billion next year.