Rep. John Lewis Helps Prevent Medicare Premium Increases
Whenever I am in the grocery store, I run into seniors who are afraid their Social Security checks will not be enough to cover their Medicare premiums. Many times, Social Security is the only income these seniors have and, if they cannot pay their Medicare premiums, their ability to get health care is in jeopardy. Plus, they will have little or nothing to live on, if increasing Medicare premiums eat up their allowance. Often, we hear about the importance of health care reform for working families, but it may be one of the most important ways that government can serve the senior population. This economic downturn has hit them harder than other citizens in our district. Their retirement savings are disappearing. Any cushion they had to help pay for medical care and prescriptions is almost gone. And they see an even darker cloud building on the horizon - Medicare Part B premiums are increasing at the same time the recession may cause them to lose their cost of living adjustment on next year's Social Security Payments. I am proud to report that my colleagues and I in the House have heard these concerns, and we have passed legislation that stops unfair Medicare Part B premium increases for seniors and people with disabilities.
While the current law protects most seniors from this increase in Medicare Part B premiums, 11 million Americans would still be hurt. The "Medicare Premium Fairness Act," H.R. 3631, will protect those 11 million seniors and people with disabilities from unfair increases in their 2010 Medicare Part B premiums. Medicare Part B premiums are taken directly out of beneficiaries' Social Security checks. If these premiums increase while no cost-of-living adjustment is added to Social Security next year, some seniors would see a marked decrease in their monthly income. They are already living on a tight budget. They cannot afford any decrease in their income. This bill will ensure that America's seniors and the disabled continue to have access to affordable health care and that all Medicare beneficiaries are treated fairly. It makes sure that no seniors will see a decrease in their Social Security checks due to Medicare Part B premiums adjustments.
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 (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 (COLA) may 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 and the bill is fully paid for by reducing the Medicare Improvement Fund, a non-controversial set-aside fund in Medicare.
The bill has been endorsed by AARP, the National Committee to Preserve Social Security and Medicare (NCPSSM), the Center for Medicare Advocacy (CMA), Alliance for Retired Americans, the National Active and Retired Federal Employees (NARFE) Association, the National Association of State Medicaid Directors (NASMD), and the Consortium for Citizens with Disabilities (CCD).