Notes on the budget from senior advocacy groups

[eridani]

Some hits, but dodged a number of worse bullets.

The Congressional Budget Deal & Seniors

http://www.ncpssm.org/PressRoom/NewsReleases/Release/ArticleID/1452/The-Congressional-Budget-Deal-Seniors

Reaction by NCPSSM President/CEO Max Richtman
News Release

“At the risk of damning by faint praise, the newly negotiated budget deal certainly could have been a lot worse. The good news is Democrats in Congress and the White House were able to stop a 52% premium increase from hitting millions of seniors in Medicare next year. They also negotiated a re-allocation (originally blocked by the GOP) for the Social Security disability program that prevents a massive benefit cut in 2016 for Americans with disabilities. In this current Congressional atmosphere of hostage-taking and never-ending threats to benefits, these victories are significant.

Unfortunately, seniors will still receive no cost of living adjustment in 2016 and the sequester cuts to Medicare providers will continue to pay for non-Medicare programs. It’s clear the GOP-led Congress still sees Social Security, Medicare and Medicaid as piggy banks to fund other legislative priorities and this hostage-taking, threats to benefits and crisis creation will continue. We hope Congress can get the votes to approve this budget deal so that seniors, people with disabilities and their families may finally see a temporary cease-fire in this ongoing assault on their benefits.”...Max Richtman,

NCPSSM President/CEO

Specifically, this budget agreement, if passed, would:

--Prevent a 19% cut in Social Security Disability Insurance benefits that would have occurred in late 2016
--Ensure 7 years of certainty that the Social Security Disability insurance program will pay full benefits
--Mitigate a 52% Medicare Part B premium increase for 30% of Medicare beneficiaries
--Alleviate an increase in the Part B deductible for all beneficiaries, lowering it from a projected $223 to $167
--Provide sequester relief to programs like the Older Americans Act, Low Income Home Energy Assistance Program and Social Security field offices without cutting Social Security, Medicare and Medicaid benefits.

Unfortunately, the bill would also:

--Provide NO relief to seniors who will receive no cost of living adjustment in 2016.
--Extend the Medicare provider reimbursement sequester and uses the savings to pay for unrelated programs.
--Cut Social Security spousal benefits for individuals who have voluntarily suspended their benefits by using the so-called “aggressive claiming” loophole. This benefit cut would occur next year.

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Media Inquiries to:
Pamela Causey 202-216-8378/202-236-2123
Kim Wright 202-216-8414 www.ncpssm.org

Proposed Budget Seeks to Reduce Dramatic Rise in Part B Costs; Advocates Remain Concerned About Underlying Causes

October 27, 2015 - Congress is considering the Bipartisan Budget Act of 2015. This proposed budget agreement would reduce an expected spike in the Medicare Part B deductible and premiums for 2016. The premium increase, expected to be over 50% for beneficiaries who do not already have premiums taken from their Social Security, will instead be about 15%. Similarly, the Part B deductible would increase approximately $20.00 rather than the previously projected $75.00. The cost of limiting the increases will be paid for by a loan from general revenues. Medicare beneficiaries will pay back the loan over time from set increases to future premiums.

“While we have concerns about the way in which the Part B cost-sharing resolution is paid for, we are glad people who rely on Medicare can breathe a bit easier – knowing their premiums and deductible will not skyrocket next year,” said Judith Stein, founder and executive director of the Center for Medicare Advocacy.

Although relieved that Congress seems poised to address next year’s Medicare Part B cost-sharing, the Center for Medicare Advocacy remains concerned about the expenses underlying these increases. “We continue to urge law-makers to join Congressman Courtney in asking Secretary Burwell to investigate and fix the underlying reasons for the huge increase in Part B costs. Much of the increase seems to come from parallel increases in billing inpatient hospital care to Part B through the use of so-called ‘outpatient’ Observation Status.”

For more information or to speak with one of our staff, contact Center for Medicare Advocacy Communications Director Matt Shepard at [e-mail] or 860-456-7790.

[djean111]

1. I do not think the negotiators on either side ever intended for one second to do

anything about the no COLA issue. The final agreement is, IMO, just the Third Way-GOP getting what they wanted in the first place. The important part was to continue gutting medicare in one way or another in order to pay for more war, and to let folks on either side proclaim some sort of victory..

[eridani]

2. Further comments from Center for Medicare Advocacy

House Passes Budget Agreement That Would Reduce Dramatic Rise in Part B Costs for Beneficiaries – Bill Moves to Senate; Advocates Remain Concerned About Underlying Causes

Today, the U.S. House of Representatives passed the Bipartisan Budget Act of 2015. Broadly speaking, this agreement avoids a pending government default by raising the nation’s debt ceiling, and prevents relief from budgetary “sequester” spending limits that have constrained social service programs. The bill also provides temporary stability to the Social Security Disability Insurance fund.

On the Medicare front, this budget agreement would reduce an expected spike in the Medicare Part B deductible and premiums for 2016. The premium increase, expected to be over 50% for beneficiaries who do not already have premiums taken from their Social Security, will instead be about 15%. Similarly, the Part B deductible would increase approximately $20.00 rather than the previously projected $70.00 or more (note that these figures are approximate because the Centers for Medicare & Medicaid Services (CMS) has not yet released the final 2016 Medicare premium and cost-sharing amounts). The cost of limiting the increases will be paid for by a loan of general revenue from the Federal Treasury to the Part B Trust Fund. Medicare beneficiaries will pay back the loan over time from set increases to future premiums.

In short, the current budget agreement would keep 2016 Part B premiums for those who are not held harmless (as described below) – roughly 30% of the Medicare population – to approximately $120 per month. Similarly, the agreement would keep the 2016 Part B deductible for everyone to roughly $167 per year. Absent this Congressional action, these figures would be significantly higher.

Background

On July 22, 2015, the Medicare and Social Security Trustees issued the 2015 Annual Report of the Boards of Trustees of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund. The Trustees report projected a significant increase in Part B premiums for some, and a significant increase in the deductible for all.

Premiums

In part due to increased Part B expenditures (see below), the monthly Part B premium (currently $104.90) was projected to increase to $159.30 in 2016 (a $54, or 52% increase) for approximately 30% of beneficiaries.

The 30% of affected individuals are:
Those who will be new Medicare enrollees in 2016;
Those with income-related premiums (incomes higher than $85,000 for individuals);
Those beneficiaries who pay their premiums directly instead of having it deducted from their Social Security checks (or those who don’t collect Social Security, such as certain government employees); and
Individuals dually eligible for Medicare and Medicaid (these costs will be paid for by state Medicaid agencies rather than individuals).


Because Social Security announced that there will be no cost of living adjustment (COLA) to Social Security payments next year, the remaining 70% of beneficiaries will be protected by a “hold harmless” provision of the Medicare statute, meaning their premiums will stay at the same rate next year ($104.90). Because of this provision, higher increased costs would have been borne by the 30% of individuals described above, rather than a lower amount spread across the entire Medicare population.

Note that the Trustees Report also projected a drop in the premium amount for 2017, back down to $120.70 per month. (This is roughly what the premium increase would have been for everyone in 2016 if the hold harmless provision did not apply.)

The current budget agreement would keep 2016 Part B premiums for those who are not held harmless – roughly 30% of the Medicare population – to approximately $120 per month.

Those individuals who already pay a higher Part B premium due to their income will pay a proportionately higher amount.

Deductible

Similarly, because the Part B deductible is tied to the premium by statutory formula, the Trustees Report estimated that the deductible will increase from $147 in 2015 to $223 in 2016 (an increase of $76). There is no “hold harmless” provision that applies to the deductible, so it would apply to all Medicare beneficiaries. Many Medicare beneficiaries, though, have supplemental or other coverage that includes coverage of the deductible. However, state Medicaid agencies, employer plans, and certain Medigap plan carriers will pay these increased costs which could, among other things, affect premiums. Those without any supplemental coverage that covers the Part B deductible would pay the full amount.

Similar to projections relating to premiums, the Trustees Report projected that the deductible will drop in 2017 down to $169.

The current budget agreement would keep the 2016 Part B deductible for everyone to roughly $167 per year.

Repaying the Loan

In the current budget agreement, the cost of limiting the increases in 2016 will be paid for by a loan of general revenue from the Federal Treasury to the Part B Trust Fund. Medicare beneficiaries will pay back the loan over time from set increases to future premiums. Starting in 2016, beneficiaries who are not subject to the hold harmless provision – roughly 30% of Medicare beneficiaries – will pay an additional $3 in their monthly Part B premium for a number of years until the loan is repaid. Starting in 2017 and beyond, all beneficiaries will pay an additional $3 on top of their monthly premium amount, unless they are held harmless under the rules described above. Higher income individuals who are subject to a higher income-related Part B premium will pay a higher additional amount, but apparently not more than roughly $12 per month.

Underlying Causes of Increase in Part B Expenditures

While the Center has concerns about the way in which the Part B cost-sharing resolution is paid for, we are glad people who rely on Medicare can breathe a bit easier – knowing their premiums and deductible will not skyrocket next year.

We are relieved that Congress seems poised to address next year’s Medicare Part B cost-sharing increases, however the Center also remains concerned about the expenses underlying these increases. We continue to urge law-makers to join Congressman Courtney in asking Secretary Burwell to investigate and fix the underlying reasons for the huge increase in Part B costs. Much of the increase seems to come from parallel increases in billing inpatient hospital care to Part B through the use of so-called ‘outpatient’ Observation Status.

Conclusion

In the near term, we urge the Senate to pass this budget agreement in order to provide relief for millions of Medicare beneficiaries. In the longer term, we urge Congress and CMS to address the underlying Part B spending increase that led to these premium and deductible increases in the first place.

[eridani]

3. AARP statement

Statement by Retiree Leader Richard Fiesta on the Budget Agreement that Protects Social Security and Medicare Beneficiaries

October 27, 2015

“Movement to prevent a default and avert a government shutdown is welcome news for all Americans, but the deal is not perfect.

“The Alliance for Retired Americans is relieved that this budget deal would protect millions of seniors from significant increases to their Medicare Part B deductibles while preventing a 20% cut to Social Security Disability Insurance (SSDI) benefits in 2016.

“The reallocation between the Social Security Old-Age and Survivors Insurance (OASI) and SSDI trust funds would prevent a massive cut in benefits for the disabled. The transfer would not impact the long-term solvency of Social Security.

“We would have preferred no increase to Medicare Part B premiums; however, limiting the increases of those who are not ‘held harmless' is a step in the right direction. In early October, Virginia Alliance President Ron Thompson of Ivor, Virginia spoke at a Capitol Hill press conference on how the increase would financially harm him. Over the last two weeks more than 30,000 Alliance members contacted their Members of Congress saying that a 52% premium hike was unfair and unwarranted. Our voices were heard.

“While it appears a crisis has been averted, we have not improved retirement security for our nation’s seniors by expanding their earned Social Security benefits. We will continue to fight to make that a reality by urging Congress to implement a more accurate way to calculate cost-of-living adjustments: the Consumer Price Index for the Elderly (CPI-E).”