Until 1/89, the amount of the premium depended indirectly on changes in hospital costs. Effective 1/89, the HI premium is based on the estimated costs that apply to beneficiaries age 65 or over during the calendar year for which the premium is effective. This resulted in a decrease in the premium for 1989. (See HI 01005.011 Exhibit.)

The average estimated cost of providing Premium-HI benefits is to be paid in full by individuals who enroll for such coverage. No funds from general revenues of the Federal Government are contributed toward the estimated cost.

The effective date for the premium changes was revised from July to January by an amendment to the law in 4/83 (P.L. 98-21). The amendment effectively froze the 7/82 - 6/83 premium rate so that it applied through 12/83.