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Margaret L. Baptiste, president of the National Active and Retired Federal Employees Association (NARFE), today praised legislators in the House of Representatives from both sides of the aisle for passing H.R. 3631, the “Medicare Premium Fairness Act.” The bill would protect all Medicare beneficiaries -- including federal civil service annuitants who are not eligible to receive Social Security -- from an increase in their Part B premium in 2010 when they are unlikely to receive any cost-of-living adjustment (COLA).

“This bill is about equity 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 no-COLA year, while Social Security beneficiaries would not,” said Baptiste.  “We applaud Reps. Charles Rangel, Henry A. Waxman, Fortney “Pete” Stark, Frank Pallone, Chris Van Hollen and Dina Titus for being our champions on this important legislation and appreciate the bipartisan support of the Ways and Means and Energy and Commerce Committees.

“NARFE 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.”

Current projections indicate no COLA will be paid to Social Security beneficiaries and federal civilian and military retirees in 2010, and the Congressional Budget Office (CBO) 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 over a million federal, state and local government retirees who are not eligible to receive Social Security benefits.   Absent a change in law, they would not only have to pay the higher Part B premiums without a COLA, but also absorb the costs of other Medicare beneficiaries 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.

“While House passage is a clear victory for NARFE, the bill must still be approved by the Senate and signed into law by the president.  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,” added Baptiste.