Today, the House of Representatives voted 406-18 to pass the Medicare Premium Fairness Act (HR 3631) and keep Medicare premiums from going up and social security benefits from going down. Congressman Charlie Gonzalez (TX‑20), an original co-sponsor of HR 3631, issued the following statement on the importance of this bill's passage.
"Medicare and Social Security are a trust between our seniors and our government. By our action today, the House of Representatives said to America's senior citizens, We understand our responsibility and we will not let you down.' In these tough economic times it is more important than ever that we ensure that seniors don't have to pay higher Medicare premiums or receive smaller social security checks. That's why I introduced my Social Security bill, to help ensure that we never face such a threat again."
The downturn in our economy means that Social Security recipients are unlikely to receive a cost-of-living-adjustment in 2010 or 2011. Medicare Part B premiums are deducted from Social Security benefits and those Premiums were scheduled to rise as much as 25% for some seniors. Without HR 3631, that increase in premiums would have meant a smaller check every month for 11 million seniors and persons with disabilities across the country. The difference in cost will be paid out of a fund Congress previously established for such improvements to Medicare, so this won't increase the deficit.
The Social Security COLA is indexed to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The goods these younger workers purchase did not go up in cost because of the recession. Seniors, however, spend a larger portion of their income on medical care, particularly pharmaceuticals, for which the prices did rise. That means that seniors are paying higher prices with the same check. Indeed, Medicare premiums have doubled in the past nine years, while the CPI has increased 25%.
Earlier this year, Congressman Gonzalez introduced the Consumer Price Index for Elderly Consumers Act of 2009 (HR 2429) which would tie the COLA to the CPI-E, an index of the goods on which seniors actually spend their money and one that's been calculated by the Bureau of Labor Statistics for decades.
"Congress wrote the Social Security Act to explicitly prohibit Social Security benefits from ever going down," Congressman Gonzalez continued. "We need to fix how the COLA is calculated and bring rising medical costs under control to make certain that seniors can spend those benefits on the things they really need."