BALTIMORE-After years of relative stability, Medicare costs jumped more than 10 percent in 2001, and marking the largest increase since 1995, according to the Centers for Medicare and Medicaid Services.

Additionally, benefits paid under Medicare Part B — which include reimbursements for home medical equipment — soared 13 percent in 2001, surpassing Medicare's overall cost inflation rate.

While the government expects modest increases in Medicare costs each year, the extent of this year's increase alarmed some officials.

“This exploding cost inflation … is not good for anyone,” CMS Administrator Tom Scully said. “The increase in spending should refocus all of us who care about health issues on overall costs.”

CMS points to expensive technological treatment innovations, growth in the number of beneficiaries, and general and medical inflation to explain 2001 costs.

Predicting these increases, the U.S. Department of Health and Human Services recently announced it would raise Part B premiums for 2002, thus passing on some of the costs to beneficiaries. Now, seniors and the disabled will pay $54 per month for Part B benefits, an 8 percent increase over 2001 premiums.

Double-digit increases also hit the Medicaid program, whose expenditures grew 10.7 percent in 2001. CMS predicts that these rapid cost increases, due in part to rising prescription drug prices, will continue in 2002.

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