NARFE’s Statement on the Budget Agreement

FOR IMMEDIATE RELEASE Contact: Jessica Klement
October 27, 2015 703-838-7760
  jklement@narfe.org


Alexandria, VA – National Active and Retired Federal Employees Association (NARFE) President Richard G. Thissen today said he is pleased the administration and congressional leaders heeded NARFE’s calls and agreed to prevent a large and disproportionate increase in Medicare Part B premiums for federal retirees and others who do not receive Social Security benefits.

“NARFE has been sounding the alarm on this issue since July, and as a result of the Association’s hard work, these retirees will not be facing a disproportionate increase in their premiums next year,” said Thissen. “Millions of federal retirees have been justifiably concerned that they would face a steep increase in Medicare premiums next year for no other reason than that they do not pay their premiums from a Social Security check. We have received countless phone calls asking if leaders in Washington will do anything to prevent it, and with this agreement, they have.”

By way of background, under the so-called “hold harmless” provision of the Social Security Act, the dollar increase in Medicare Part B premiums is limited to the dollar increase in an individual’s Social Security benefit. Without a 2016 cost-of-living adjustment (COLA) for Social Security benefits, about 70 percent of beneficiaries are held harmless from any increase in their Medicare Part B premiums, so the premiums will remain stable at $104.90 per month for most beneficiaries.

However, the remaining 30 percent of Part B beneficiaries who are not held harmless, including federal retirees who do not receive Social Security benefits, were on track to shoulder the full cost of the 2016 premium increase. As projected by the Medicare Trustees, these individuals would have seen their premiums rise 52 percent, from $104.90 to $159.30 per month. If the hold harmless provision did not exist, all beneficiaries would see a much smaller increase of 15 percent, to $120.70 per month.

Per the budget agreement, the standard Medicare Part B premium baseline is projected to be $120.70 per month for 2016. Simply, premiums for those held harmless will not change; they will remain stable at $104.90 in 2016. For most beneficiaries who are not held harmless, premiums will rise to $120.70, plus a surcharge, as explained below.

To make up for the lost revenue to the Medicare Trust Fund as a result of lower premiums, beneficiaries will be charged a monthly surcharge of $3, starting in 2016. The $3 surcharge will not apply to those held harmless this year, but it will apply to those individuals in future years in which they are not held harmless. As such, premiums for most federal retirees who do not receive Social Security are projected to be $123.70.  Medicare beneficiaries who pay higher premiums due to their income level would see their premiums adjusted from the $120.70 baseline, plus any surcharge. The surcharge is expected to last five years.

“While I believe this is a good compromise for the 2016 premiums, Congress and the Administration must fix this situation once and for all,” Thissen said. “Millions of individuals should not have to live with this type of financial uncertainly just because their Medicare premiums do not come from Social Security.”

The budget agreement also prevents sequestration by increasing both defense and nondefense spending over the next two years. This $80 billion increase in spending levels over the next two years requires Congress to cut spending elsewhere.

“Sequestration not only hinders federal employees from doing the important jobs Congress has asked of them, but also affects millions of Americans who rely on government services every day. Nothing showed this more clearly than the 2013 sequestration-related furloughs, where federal employees lost $1 billion in take-home pay, and the public experienced delays or lapses in service,” Thissen said.

“Large budget deals like this one frequently make the federal community nervous, and for good reason. Over the past five years, Congress has consistently turned to federal employees for offsets when funding other priorities, to the tune of $120 billion in lost wages,” said Thissen. “NARFE members have repeatedly told Congress, ‘Enough is enough,’ and it appears this message is sinking in, as this budget deal does not ask for more sacrifices from federal employees and retirees. We hope our leaders in Washington are learning, finally, that they cannot balance the budget on the backs of federal workers and retirees.”

# # #

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 interests of nearly five million current and future federal annuitants, spouses and survivors.


 

National Active and Retired

FEDERAL EMPLOYEES Association

NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.

NARFE’s Statement on the Budget Agreement

FOR IMMEDIATE RELEASE Contact: Jessica Klement
October 27, 2015 703-838-7760
  jklement@narfe.org


Alexandria, VA – National Active and Retired Federal Employees Association (NARFE) President Richard G. Thissen today said he is pleased the administration and congressional leaders heeded NARFE’s calls and agreed to prevent a large and disproportionate increase in Medicare Part B premiums for federal retirees and others who do not receive Social Security benefits.

“NARFE has been sounding the alarm on this issue since July, and as a result of the Association’s hard work, these retirees will not be facing a disproportionate increase in their premiums next year,” said Thissen. “Millions of federal retirees have been justifiably concerned that they would face a steep increase in Medicare premiums next year for no other reason than that they do not pay their premiums from a Social Security check. We have received countless phone calls asking if leaders in Washington will do anything to prevent it, and with this agreement, they have.”

By way of background, under the so-called “hold harmless” provision of the Social Security Act, the dollar increase in Medicare Part B premiums is limited to the dollar increase in an individual’s Social Security benefit. Without a 2016 cost-of-living adjustment (COLA) for Social Security benefits, about 70 percent of beneficiaries are held harmless from any increase in their Medicare Part B premiums, so the premiums will remain stable at $104.90 per month for most beneficiaries.

However, the remaining 30 percent of Part B beneficiaries who are not held harmless, including federal retirees who do not receive Social Security benefits, were on track to shoulder the full cost of the 2016 premium increase. As projected by the Medicare Trustees, these individuals would have seen their premiums rise 52 percent, from $104.90 to $159.30 per month. If the hold harmless provision did not exist, all beneficiaries would see a much smaller increase of 15 percent, to $120.70 per month.

Per the budget agreement, the standard Medicare Part B premium baseline is projected to be $120.70 per month for 2016. Simply, premiums for those held harmless will not change; they will remain stable at $104.90 in 2016. For most beneficiaries who are not held harmless, premiums will rise to $120.70, plus a surcharge, as explained below.

To make up for the lost revenue to the Medicare Trust Fund as a result of lower premiums, beneficiaries will be charged a monthly surcharge of $3, starting in 2016. The $3 surcharge will not apply to those held harmless this year, but it will apply to those individuals in future years in which they are not held harmless. As such, premiums for most federal retirees who do not receive Social Security are projected to be $123.70.  Medicare beneficiaries who pay higher premiums due to their income level would see their premiums adjusted from the $120.70 baseline, plus any surcharge. The surcharge is expected to last five years.

“While I believe this is a good compromise for the 2016 premiums, Congress and the Administration must fix this situation once and for all,” Thissen said. “Millions of individuals should not have to live with this type of financial uncertainly just because their Medicare premiums do not come from Social Security.”

The budget agreement also prevents sequestration by increasing both defense and nondefense spending over the next two years. This $80 billion increase in spending levels over the next two years requires Congress to cut spending elsewhere.

“Sequestration not only hinders federal employees from doing the important jobs Congress has asked of them, but also affects millions of Americans who rely on government services every day. Nothing showed this more clearly than the 2013 sequestration-related furloughs, where federal employees lost $1 billion in take-home pay, and the public experienced delays or lapses in service,” Thissen said.

“Large budget deals like this one frequently make the federal community nervous, and for good reason. Over the past five years, Congress has consistently turned to federal employees for offsets when funding other priorities, to the tune of $120 billion in lost wages,” said Thissen. “NARFE members have repeatedly told Congress, ‘Enough is enough,’ and it appears this message is sinking in, as this budget deal does not ask for more sacrifices from federal employees and retirees. We hope our leaders in Washington are learning, finally, that they cannot balance the budget on the backs of federal workers and retirees.”

# # #

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 interests of nearly five million current and future federal annuitants, spouses and survivors.


 

National Active and Retired

FEDERAL EMPLOYEES
Association



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NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.