Thursday, October 8, 2009

Washington, D.C. – Congresswoman Dina Titus of Nevada’s Third District expressed disappointment after Senate Republicans yesterday blocked approval of the Medicare Premium Fairness Act, legislation she introduced to protect seniors and people with disabilities from an increase in their 2010 Medicare Part B premiums.  Titus’ bill passed the House last month by a vote of 406 to 18, and is supported by AARP, the National Committee to Preserve Social Security and Medicare, and the Alliance for Retired Americans.

“Today is a sad day for Nevada’s seniors as Senate Republicans stood against them in order to block legislation that would prevent an increase in Medicare premiums,” Titus said.  “With nearly 134,000 Social Security beneficiaries in my district, it is critical that Congress act to protect seniors from higher Medicare premiums at a time when every dollar counts and family budgets are stretched thin.”

“As Nevada struggles through the worst economic recession in a generation and retirement savings have fallen to half their value, now is the time to stand up for our seniors to they will have the health care they need at an affordable price.  Sadly, Senate Republicans would rather stand in the way.  I urge the Senate to continue to work on this important issue and pass this legislation.” added Titus.

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.  This is the first time that such an interaction has occurred.

This bill extends 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: economy, health care