Heinrich Votes To Protect Medicare Beneficiaries From Higher Premiums

Press Release

U.S. Representative Martin Heinrich (NM-1) today voted to protect seniors from unfair increases in their 2010 Medicare Part B premiums. The passage of H.R. 3631, the Medicare Premium Fairness Act, comes at a time when so many of New Mexico's seniors are burdened by rising premiums. These hikes 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.

"When you're talking about seniors and people with disabilities not being able to access affordable health care, it's not a political matter, it's a matter of life and death," said Rep. Heinrich. "New Mexico's seniors rely on Medicare. This bill provides our seniors with greater access to preventive care at an affordable price."

H.R. 3631 passed the House of Representatives today by a vote of 406 to 18 and has earned the support of AARP, the National Committee to Preserve Social Security and Medicare, the Center for Medicare Advocacy, Alliance for Retired Americans, and the National Active and Retired Federal Employees Association.

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. 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, 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.

The nonpartisan Congressional Budget Office 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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