Thursday, September 24, 2009

Washington, D.C. – Congresswoman Dina Titus of Nevada’s Third District joined colleagues from the Ways and Means Committee and Energy and Commerce Committee today to introduce today H.R. 3631, the Medicare Premium Fairness Act.  The legislation will protect seniors and people with disabilities from increases in their 2010 Medicare Part B premiums.  With Social Security benefits expected to remain at the same level next year, an increase in Medicare premiums would cut into seniors’ Social Security. 

“This important legislation will protect Nevada’s seniors from an increase in premiums at a time when too many are struggling to make ends meet,” Congresswoman Titus said.  “The combination of higher premiums and no cost-of-living adjustment is unacceptable for seniors who count on every dollar of their benefits.”

The bill is expected to be on the House floor tomorrow, and has received the support of AARP, the National Committee to Preserve Social Security and Medicare, the Center for Medicare Advocacy, Alliance for Retired Americans, and the National Active and Retired Federal Employees Association.

Background

Currently, 42 million seniors and people with disabilities are enrolled in Medicare Part B.  The standard Part B premium for 2009 is $96.40 per month, it is (higher for individuals with incomes over $85,000 or $170,000 for couples).  By law, the premium is calculated each year to cover approximately 25 percent of the cost of the Medicare program.

Premiums would normally increase to roughly $103 next year to cover 25 percent of the program’s cost.  However, a current law “hold harmless” policy ensures that most seniors do not see a decrease in their Social Security checks if the Part B premium increase is projected to be greater than the increase in Social Security.  Because of the recession, next year’s Social Security cost-of-living adjustment is likely to be zero and checks will not increase; the current law "hold harmless" means that Part B premiums will not increase for 2010 for 73 percent of enrollees.

The other 27 percent of enrollees are not held harmless under current law.  These include low-income individuals who are eligible for Medicare and Medicaid (18%, or 7.3 million beneficiaries), higher-income Medicare beneficiaries (5%, or 2.1 million beneficiaries), new Medicare enrollees (3% or 1.3 million beneficiaries) and enrollees whose Medicare premiums are not deducted from their Social Security checks (2%, or 850,000 beneficiaries).  Because of the way the law is written, premiums for the enrollees who are not currently held harmless would be disproportionately increased to $110-$120 per month, unless Congress acts.  This is the first time that such an interaction has occurred.

This bill would extend the current hold harmless policy to all Medicare enrollees, meaning that no seniors will see a decrease in their Social Security checks due to Medicare Part B premiums.

CBO estimates the cost of the bill at $2.8 billion for 2010.  It meets PAYGO requirements and is fully paid for by reducing the Medicare Improvement Fund, a non-controversial set-aside fund in Medicare.

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Tags: health care