NARFE Urges Congress to Act on Disproportionately High Medicare Part B Premium Increase

WASHINGTON, DC – Richard G. Thissen, National President of the National Active and Retired Federal Employees Association (NARFE), called on Congress to take action to prevent a disproportionately high increase in Medicare Part B premiums for millions of America’s seniors, including many federal retirees. On November 10, the Centers for Medicare & Medicaid Services announced that Part B premiums will rise by an average of $4 per month for most beneficiaries, but will rise by more than $12 per month – 10 percent – for 30 percent of beneficiaries, including hundreds of thousands of federal retirees.

This is due to the effect of the so-called “hold harmless” provision of the Social Security Act, which states that the dollar increase in the Part B premium is limited to the dollar increase in an individual’s Social Security benefit. With a 0.3 percent cost-of-living adjustment (COLA) set to take effect in 2017, an estimated 70 percent of beneficiaries will be held harmless, meaning their Part B premium will increase in proportion to their Social Security benefit, for an average of $4 per month, from $104.90 to $109.

The remaining 30 percent of Part B beneficiaries who are not held harmless, including federal retirees covered by the Civil Service Retirement System (CSRS) and who do not receive Social Security benefits, will see their premiums rise from $121.80 per month to $134.

“For the second year in a row, some federal retirees will be paying more in premiums simply because they pay those premiums through their federal annuity instead of through Social Security benefits. While premiums for most have risen, on average, only $4 per month over the past two years, those who are not held harmless saw their premiums rise nearly $30 per month. How one pays their premiums should not dictate the amount of those premiums. This situation is grossly unfair to millions of Americans,” said NARFE President Thissen.

“The low COLA, combined with the increase in premiums, means many federal retirees will see a decrease in their federal annuities next year, diminishing their purchasing power and quality of life. But this is about more than money. It’s about fairness. It is time to fix a congressional oversight that occurred when the hold harmless provision was initially enacted. Those who pay their Part B premiums from something other than Social Security should be treated the same way as those who do,” Thissen said. 

“Now that the administration has announced the 2017 premiums, NARFE urges Congress to prevent this disproportionately high Medicare premium increase for federal retirees and millions of others. When it was announced in 2015 that there would be no COLA in 2016, Congress acted swiftly to limit the projected increase from 52 percent to 15 percent for those not held harmless. While this agreement wasn’t perfect, it provided some relief to federal retirees, and I urge Congress to act just as quickly to prevent this unfair increase,” Thissen concluded.

NARFE joined with 74 other organizations urging Congress to take action in a letter to congressional committee leaders. The letter states, “As it did in 2015, Congress should make it a priority to shield people with Medicare from the unintended consequences resulting from the application of the hold harmless provision. 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 Congress to act accordingly and swiftly following the announcement of the 2017 COLA. The longer Congress delays, the more uncertainty for our nation’s retirees, people with disabilities, and their families who are counting on you.”

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The National Active and Retired Federal Employees Association (NARFE), one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/retiree organization, NARFE represents the retirement interests of nearly five million current and future federal annuitants, spouses and survivors.