Washington, D.C.—The National Treasury Employees Union (NTEU) urged Congress to quickly pass legislation that would protect 16 million retirees from sharply higher premiums for Medicare Part B coverage next year.
According to this year’s Medicare Trustees Report, enrollee premiums for Medicare Part B—a federal program that pays for doctor services, outpatient care, and some home health care—are projected to increase by more than 50 percent next year.
However, about 70 percent of Social Security beneficiaries who get Part B premiums deducted automatically from their monthly Social Security checks won’t have to pay those higher premiums because they are covered by the “hold harmless rule” in federal law.
NTEU National President Tony Reardon said that the remaining 30 percent—or about 16 million retirees, including many who retired from federal service—are likely to see their monthly Part B premiums surge from $104.90 a month to about $159.30 a month.
“That will be a financial gut punch for these retirees. The majority of them are living on fixed incomes and can’t afford this,” Reardon said. “I’m issuing an urgent appeal to Congress to prevent this huge premium increase from going into effect.”
NTEU has sent letters to Capitol Hill supporting S. 2148, introduced by Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee, and H.R. 3696, introduced by Rep. Dina Titus (D-Nev.). Both bills would block the premium increases.
The hold harmless rule says Social Security payments can’t be reduced from one year to the next because of cost increases in Medicare Part B. Social Security payments are not expected to increase next year because cost-of-living adjustments (COLAs) are unlikely.
Though Medicare Part B premiums are projected to skyrocket, the majority of Social Security recipients won’t feel the pinch thanks to the hold harmless rule. Individuals who have their Medicare premiums deducted directly from their Social Security checks will not experience any increase in Medicare Part B premium payments.
The 16 million retirees excluded from the rule includes about 1.6 million people who retired under the Civil Service Retirement System (CSRS) and therefore have little or no Social Security income. Retired federal workers enrolled in Medicare but not in Social Security and newer federal retirees who will be signing up for Medicare next year will also be affected.
“It’s absolutely unfair to force these 16 million retirees to pay these dramatically higher premiums,” President Reardon said. “NTEU is committed to doing all it can to protect seniors from escalating and unaffordable Medicare costs in 2016.”
NTEU has written to the administration, urging a quick fix to this problem, and has also joined about 70 other organizations to press Congress to act quickly.