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Medicare Premium Fairness Act

On September 24th, the House passed the Medicare Premium Fairness Act (HR 3631), to protect 11 million seniors and cash-strapped states from unfair increases in their 2010 Medicare Part B premiums. These hikes would directly threaten the pocketbooks of 4 million new enrollees and retirees, as well as state budgets, which cover premiums for 7 million low-income seniors.  There is no reason this burden should fall on seniors and people with disabilities, especially during difficult economic times.

Under current law, for nearly three-quarters of Medicare enrollees, their Medicare Part B premium --which covers physician and outpatient care and is deducted from Social Security checks -- cannot increase more than the cost of living adjustment for Social Security.  The Social Security COLA is likely to be zero next year because of the recession.

Without congressional action, the other 27 percent of enrollees will see their Part B premium increase from $96 per month to $110-120 per month, because Part B premiums are required by law to cover 25 percent of Medicare Part B's costs.  Those who will see this premium increase include:

  • low-income dual eligibles
  • higher-income Medicare beneficiaries
  • new Medicare enrollees
  • enrollees whose Medicare premiums are not deducted from their Social Security checks 

The Medicare Premium Fairness Act extends the 'hold harmless' policy to protect all Medicare enrollees from an increase larger than the Social Security COLA, so that the 2010 Part B premiums will remain at $96.40 and no seniors will see a cut in their Social Security checks.

The legislation does not add to the deficit: CBO estimates the bill's cost at $2.8 billion for 2010; it is fully paid for and meets PAY-GO requirements using financing from the Medicare Improvement Fund - established a few years ago to be available for the Secretary to make improvement to Part A and B benefits.

The bill is endorsed by AARP, The National Committee to Preserve Social Security and Medicare (NCPSSM), the Center for Medicare Advocacy (CMA), Alliance for Retired Americans, National Association of State Medicaid Directors, the Consortium for Citizens with Disabilities (CCD), Bazelon Center for Mental Health Law, and the National Active and Retired Federal Employees (NARFE) Association.