NARFE Urges Congress to Act on Legislation to Mitigate Disproportional Medicare Premium Increases in 2017
FOR IMMEDIATE RELEASE Contact: Jessica Klement
December 5, 2016 703-838-7760
  jklement@narfe.org


Alexandria, VA – Richard G. Thissen, national president of the National Active and Retired Federal Employees Association (NARFE), called on Congress to pass H.R. 6428, introduced by Rep. Dina Titus, D-NV, which would extend limits on Medicare Part B premium increases in 2017 to those who do not pay premiums directly from a Social Security benefit.

“How one pays their Medicare premiums should not dictate the amount of those premiums. And it certainly should not mean that they must pay more than those with the same income. This situation is grossly unfair to millions of Americans,” said Thissen. “NARFE thanks Rep. Titus and the 34 original co-sponsors of H.R. 6428 for supporting a fix for this unfair situation. We urge their colleagues in Congress to join them and pass the bill into law.”

While the so-called “hold harmless” provision of Medicare law limits Part B premium increases for most beneficiaries to the annual cost-of-living adjustment (COLA) in their Social Security benefit – an average increase of $4 in 2017 – that protection does not apply to those who do not pay premiums from a Social Security benefit, new enrollees or those with higher incomes. Furthermore, because total Medicare premiums are designed to cover 25 percent of the cost of the program, those not held harmless are forced to pay higher premiums to cover the lost premium income resulting from application of the hold harmless provision to others.

H.R. 6428 would limit premium increases to $4 for individuals who are not held harmless, and not subject to higher premiums due to higher incomes. For those paying the standard premium, their premiums would rise from $121.80 per month to $125.80 per month under the bill, instead of by 10 percent to $134 per month. The bill would not affect premiums for those already held harmless, about 70 percent of beneficiaries, whose premiums will increase in proportion to their Social Security benefit, for an average of $4 per month, from $104.90 to $109 per month.

“For the second year in a row, many federal retirees, state government retirees, new enrollees and individuals who delay receipt of Social Security benefits will be paying more in premiums simply because they pay those premiums through their federal annuity or a personal check instead of through Social Security benefits,” explained Thissen. “While premiums for most have risen, on average, only $4 per month over the past two years, those who are not held harmless will see their premiums rise nearly $30 per month.”

“The low, 0.3 percent 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,” Thissen said.

“H.R. 6428 would do no more than extend the same protections the majority of beneficiaries enjoy to federal retirees, state government retirees, new enrollees into Medicare and those who are not yet collecting Social Security. It is a common-sense solution and does not increase deficits by one cent,” noted Thissen. “Congress took steps to mitigate the increase last year when those not held harmless were facing a 52 percent increase in premiums. We urge Congress to do so again before adjourning.”

Earlier last week, NARFE joined its Federal-Postal Coalition colleagues in urging Congress to act on the issue, stating: “This unfair situation was created years ago, and it is time for Congress to right this unintended wrong. No beneficiary should be forced to pay more simply because some beneficiaries are afforded critical protections against reductions in their Social Security checks.”

H.R. 6428 presents a common-sense solution. Congressional leadership must now put it up for a vote.

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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.