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Letter to the Senate on Medicare Part B cost hikes

October 26, 2015

Dear Senator:

On behalf of the three million members of the National Education Association (NEA) we urge you to cosponsor and support the Protecting Medicare Beneficiaries Act of 2015 (S. 2148) introduced by Senator Wyden (D-OR), that would extend the “hold harmless” provision to all Medicare beneficiaries, protecting them against higher Part B premiums and deductibles.

On October 15, 2015, the Social Security Administration announced that there will be no cost-of-living adjustment (COLA) for Social Security beneficiaries in 2016. This is the third time, since the enactment of the program in 1972, that seniors and disabled individuals will not receive a COLA. When seniors don’t receive a COLA, a provision known as “hold harmless” protects 70 percent of beneficiaries from higher Medicare Part B premiums. Unfortunately, 30 percent of seniors and persons with disabilities are not protected. These include new Medicare beneficiaries (2.8 million), public sector retirees not receiving Social Security (1.6 million – those in Government Pension Offset (GPO)/Windfall Elimination Provision (WEP) offset states), higher income beneficiaries (3.1 million) and low-income beneficiaries who have both Medicare and Medicaid (9 million).

As a result, the beneficiaries who are not protected will have to pick up the cost for all those who are “held harmless,” and the estimated cost is a 52 percent increase in their monthly Part B premiums in 2016. This is because Medicare law requires that beneficiaries pay 25 percent of the cost of the Part B program through monthly premiums. This effect is even more devastating for public sector retirees such as educators whose Social Security benefits are already unfairly reduced or eliminated by the GPO and WEP offsets. Asking these retirees, and the other individuals who would be affected by changes in Medicare Part B, to pay more for their benefits only exacerbates an existing inequity.  

While 70 percent of seniors and persons with disabilities will be protected from higher Part B premiums, all beneficiaries will be required to pay a dramatically higher Part B deductible in 2016. Without intervention, the Part B deductible will increase from $147 this year to $223 in 2016. 

We are deeply concerned by the projected Part B premium and deductible increases, most notably for current and newly eligible beneficiaries living on low- and fixed incomes. In 2014, half of the Medicare population lived on annual incomes of $24,150 or less. Newly enrolled Medicare beneficiaries, those not collecting Social Security benefits—many of whom are retired educators and public servants—and state Medicaid programs should not be expected to carry the burden of paying for increased costs in Part B through higher premiums and cost sharing.

No beneficiary should be forced to pay more than they otherwise would simply because some beneficiaries are afforded critical protections against reductions in their Social Security checks. We urge you to take swift action to protect beneficiaries from the Part B premium and deductible increases by cosponsoring and supporting H.R. 3696. This bill will maintain 2015 premium and deductible rates through 2016, so the 16.5 million Medicare beneficiaries who are not currently held-harmless will not face the financial hardship what could amount to the largest increase in in the Part B premium and deductible in the history of the Medicare program.

Sincerely,

Mary Kusler

Director of Government Relations