Action stops insurance increase for about 27% of senior citizens, others protected already; Seniors won’t see COLA for 2010

Friday, September 25, 2009

Senior citizens may have a little financial relief on the way in 2010 as they prepare to make ends meet without a cost-of-living increase in their Social Security check. The House of Representatives yesterday overwhelmingly approved a bill that will prevent an increase in the Medicare Part B insurance by making $567 million available to pay the additional cost in 2010.

The vote for the Medicare Premium Fairness Act was 406 in favor, 18 against and 8 Representatives did not vote. Among the 18 voting against the bill by Rep. Dina Titus, a Nevada Democrat, were 13 Republicans and 5 Democrats. The bill also had 54 cosponsors.

Unless Congress acts quickly, millions of America's seniors will find themselves with a smaller Social Security check at a time when they are already stretching every dollar they have,” said Rep. Frank Pallone, Jr. (D-NJ), Chairman of the Subcommittee on Health in the Committee on Energy and Commerce.

“If we don't act today, 27 percent of Medicare beneficiaries will see their part B premium increase from $96 to $110 or $120. That's potentially a 25 percent increase in their Medicare part B premiums when they're getting no increase in their Social Security COLA.”

According the summary of the bill (H.R. 3631), it does the following:

“Amends title XVIII (Medicare) of the Social Security Act with respect to the part B (Supplementary Medical Insurance Benefits for Aged and Disabled) premium for 2010. Makes such premium, and the related monthly acturial rate, the same as those for 2009.

“Requires transfer from the Treasury general fund to the Federal Supplementary Medical Insurance Trust Fund of an amount estimated to be equivalent to the aggregate reduction in part B premiums resulting from application of this Act. Revises the formula for funding the Medicare Improvement Fund (MIF) to reduce (offset) the amount available to the MIF for FY2014 by the transfered amount plus $567 million. Makes $567 million the amount available to the MIF for FY2015.”

In the floor debate, Rep. Joe Barton (R-Tx), who voted for the bill, pointed out that this legislation does not impact all Medicare beneficiaries, since some seniors were not going to get the Medicare increase.

“Within part B there are three classes of Medicare beneficiaries,” Rep Barton said.

“There are Medicare beneficiaries that have a high income. There are Medicare beneficiaries that have average incomes, and there are Medicare beneficiaries that have low income.

“Under current law if you have been covered in Medicare in a prior year and you don't have a high income, you don't have a low income, you are held harmless by the current law.

"But if you're a new Medicare beneficiary, in other words, you weren't on the program last year, if you're a high-income Medicare beneficiary, or if you're a low-income Medicare beneficiary, then you're not held harmless.”

Barton said about 25 percent of the total Medicare population is “not held harmless,” and they are the ones who will see their Medicare premium increase.

“The current premium this year is about $96, and under current law if you weren't protected, it would go up to about $104. So that's about an $8 increase or a little over maybe 7 or 8 percent,” he added.

He also pointed out that in normal years there is a cost-of-living adjustment (COLA), determined by the rate of inflation, applied to Social Security payments, as well as an increase in the Part B premium, which is deducted from the Social Security payment. The benefit increase usually offsets the Medicare Part B cost increase.

“But this year we didn't have inflation,” Barton said. “The consumer price index, because of the recession, didn't go up; so our seniors didn't get their Social Security increase. But Medicare spending went up last year because we haven't reformed the program. So the Medicare part B premium, which is optional, went up; and if you weren't protected, your premium went up.”

The bill’s sponsor, Rep. Titus, told the House members, “Because this bill is fully paid for by using existing funds including the Medicare Improvement Fund and it meets the PAYGO requirements, it is a responsible way to stand up and provide for our seniors during these tough economic times.”

The bill must still be passed by the Senate and signed by President Barack Obama to become law. It is expected to go to the Senate Finance Committee for consideration.

Tags: health care