Elderly and disabled people will see their Medicare premiums rise 3.1 percent next year from the current $93.50 to $96.40 a month -- the lowest increase in six years.

The base premium is paid by beneficiaries with incomes at $82,000 or less, or about $164,000 for married couples. That increase will affect about 95 percent of beneficiaries, Medicare said.

BUT FOR THE WEALTHY...

The wealthiest, however, will pay more. The highest premiums -- up to $238.40 a month, a 48 percent increase -- are paid by those with incomes of more than $205,000 for an individual or $410,000 for a couple.

how it was calculated

However, the new formula also assumes that physicians will take a 10 percent cut in their reimbursement rates next year, an unlikely occurrence. If, as expected, Congress acts to offset some of that pay cut or to eliminate it, premiums in future years would go up to reflect the additional expense.

WHY THE LOW INCREASE?

One factor in the lower-than-usual premium increase for most beneficiaries was the fixing of an accounting error that otherwise would have added $2.50 to beneficiaries' monthly premiums in 2008. Money was returned to the main Medicare account that pays for physicians' services after mistakenly being used to provide hospice benefits. From 2006 to 2007, the base premium for Medicare had risen 5.6 percent. While fixing that error will give beneficiaries a break on their premiums, it also will hasten the depletion of the Medicare trust fund. Currently, the trust fund is expected to be depleted in 2019.

who are the beneficiaries?

The Medicare program pays for most of the health care received by about 43 million seniors and disabled people. The program's expenses have soared in recent years as health care costs go up faster than most other segments of the economy and as more people join the program. Beneficiaries will be most concerned about expenses in two key segments of Medicare:

MEDICARE PART A

This covers inpatient hospital and hospice care as well as short stays in nursing homes. For this program, participants don't pay a monthly premium. However, they do pay a deductible when they have to go to the hospital. That deductible will increase from $992 to $1,024 next year.

MEDICARE PART B

This covers services received at a doctor's office and in outpatient settings. The program also pays for medical equipment such as wheelchairs and oxygen tanks. About a quarter of the revenue for this program comes from beneficiaries' monthly premiums. The deductible for Part B services will increase from $131 to $135, after which Medicare pays 80 percent of allowable charges.

Causes of increase

Kerry Weems, the acting administrator for the Centers for Medicare and Medicaid Services, said rising demand for health care was the primary driver behind the premium increase. Other factors included higher payments to private insurers and setting aside more money for a reserve fund. Weems said, "Even though this is the lowest increase we've seen in six years, we continue to be very concerned about growing health care costs."

ADVOCATES' REACTION

Advocacy groups for Medicare beneficiaries said the federal government could help lower most beneficiaries premiums if it reduced payments to private insurers. The insurers get a subsidy for overseeing care. In turn, these insurers, not the federal government, reimburse health care providers.