Federal Civil Service Retirement System (CSRS) annuitants who are not eligible to receive Social Security would not have to pay an increase in their Medicare Part B premiums in 2010 under H.R. 3631, the Medicare Premium Fairness Act, passed by the House of Representatives on September 24 by a vote of 406-18.

“This bill is about equity and fairness for all Medicare beneficiaries because, without it, federal, state and local government retirees who are not Social Security-eligible would have to pay the Part B rate hike in a year in which they receive no cost-of-living adjustment (COLA), while Social Security beneficiaries would not,” said Margaret L. Baptiste, NARFE president.  

“We applaud Reps. Charles Rangel, D-NY; Henry A. Waxman, D-CA; Fortney “Pete” Stark, D-CA; Frank Pallone, D-NJ; Chris Van Hollen, D-MD; and Dina Titus, D-NV, for being our champions on this important legislation and appreciate the bipartisan support of the Ways and Means and Energy and Commerce Committees.

“The NARFE Legislative Department has worked tirelessly behind the scenes on this legislation for the past three months,” added Baptiste, “and we are gratified to win equity for all federal annuitants. And, while we recognize those who were behind this bill, we must pay special homage to Rep. Van Hollen for being one of our most persistent advocates.”

Why the Bill Is Needed

Current economic conditions will likely mean that no COLA will be paid to Social Security beneficiaries and federal civilian and military retirees in 2010, and the Congressional Budget Office has predicted the possibility of no COLA for 2011 and 2012. Under present federal law, about 75 percent of Medicare beneficiaries are not required to pay — or are “held harmless” — for the increase in Part B premiums in any year when they receive no Social Security COLA.

However, there are four groups of older Americans who are not protected by the “hold harmless” provision, including more than one million federal, state and local government retirees who are not eligible to receive Social Security benefits. Without a change in law, those retirees would not only have to pay the higher Part B premiums without a COLA but would also have to absorb the costs of other Medicare beneficiaries currently “held harmless.” For example, the Part B premium is predicted to go from approximately $96 to $104 in 2010. The groups not held harmless might see their premiums rise to $110 or more as they pick up the costs of the others currently “held harmless.”

The House-approved bill would shield all older Americans from the Part B premium increase in 2010, including government retirees who are not eligible for Social Security.  That means no one would pay the Part B increase next year.  The legislation is fully financed through the Medicare Improvement Fund.

Beyond federal, state and local government retirees, there are three other groups that would benefit from the Medicare Premium Fairness Act: individuals newly eligible for Medicare, low-income persons whose premiums are usually paid by Medicaid and persons who are subject to a “means-tested” Part B premium. Since January 1, 2007, single beneficiaries with annual incomes over $85,000 and couples with annual incomes over $170,000 have been required to pay a larger percentage of their Part B premiums than less-affluent recipients.   

Hoyer Objects

While the bipartisan support for the bill was overwhelming, House Majority Leader Steny H. Hoyer, D-MD, was one of the few to speak against the bill and one of only 18 to vote against it.

“Do I stand here happy that some seniors around the country are going to say Steny Hoyer was against them? I am not happy about that,” Hoyer said. “But I have felt it my responsibility to come to this floor, as someone who speaks about entitlement reform, as someone who believes we have got to exercise fiscal discipline, as someone who believes we ought to take care of the less well-off in our country, which are taken care of by the present law.”

Hoyer was specifically critical of protecting wealthier beneficiaries (subject to the Part B means-testing) from the premium increase.  

Senate Approval Urgent

“Although House passage is a clear victory for NARFE, the bill must still be approved by the Senate and signed into law by the president,” noted Baptiste. “In fact, we urge the Senate to speed consideration of H.R. 3631 to ensure that the Centers for Medicare & Medicaid Services have enough time to adjust their processing systems to prevent federal annuitants and other retirees from paying the premium increase before it becomes effective in January 2010.”