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Congressman Pascrell Co-sponsors Legislation To Protect Medicare Beneficiaries

Press Release

Location: Washington, DC

In an effort to protect seniors and the disable from unfair premium increases, U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) and his colleagues on the House Ways and Means Committee introduced legislation aimed at protecting seniors and the disabled from an unfair premium increase for Medicare Part B.

"This is our way of protecting some of our most vulnerable citizens from incurring even more hardship during this tough economic time," said Pascrell, an original co-sponsor of the Medicare Premium Fairness Act. "If there is no cost of living adjustment in Social Security benefits next year, then beneficiaries should not be held liable if they cannot pay their premium. This legislation will be their safety net."

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.

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