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Bill Could Offset Medicare Premium Increases for Federal Retirees

Alex M. Parker | Government Executive

September 29, 2009

The House last week overwhelmingly passed legislation that supporters say will save money for thousands of federal retirees facing a potential increase in their Medicare Part B premiums.

The 2009 Medicare Premium Fairness Act would affect many retirees under the Civil Service Retirement System, who do not receive Social Security payments since CSRS was designed to be equivalent to the Social Security system. According to the bill’s sponsors, those retirees, as well as others retirees in local government and the private sector, could see premium hikes of $110 to $120 per month for Medicare Part B, which pays for outpatient health care expenses such as doctor’s fees.

The bill was introduced on Sept. 23 in response to estimates that there will be no cost-of-living adjustments in 2010 for Social Security payments. Under current law, most Medicare enrollees are protected from any Medicare Part B premium increases beyond Social Security cost-of-living adjustments by a “hold harmless” provision. But that protection does not include those outside the Social Security system or the thousands of others who do not have their Medicare premiums deducted from their Social Security payments.

The legislation would provide a one-year protection from higher premiums for those retirees.

According to the National Active and Retired Federal Employees association, those affected by the potential premium hike include about 1 million local, state and federal employees, as well as other private sector citizens who do not qualify for the hold harmless provision.

“Seniors around the country, and in the congresswoman’s district especially, have been hit hard during this recession,” said Andrew Stoddard, spokesman for Rep. Dina Titus, D-Nev., the bill’s sponsor. “Many have seen their retirement savings start to dry up during these tough economic times. Being hit with additional health care costs due to Medicare was unacceptable.”

“This bill is about equality for all Medicare enrollees,” said Margaret Baptiste, NARFE president.

The House passed the bill on Sept. 24, and it’s been referred to the Senate Finance Committee. Staffers from the committee — which resumes its markup of the massive health care reform bill on Tuesday — did not return calls for comment.

According to Stoddard, Congress will have to act soon for the Medicare Premium Fairness Act to take effect in fiscal 2010. The bill’s $2.8 billion cost will come from the Medicare Improvement Fund, Stoddard said. Congress established the improvement fund in 2008 to pay for improvements to Medicare Parts A and B.

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