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House Passes Bill Blocking Price Hikes for Medicare Part B Premiums

The measure affects one in four Medicare beneficiaries.

The House on Thursday voted overwhelmingly—406 to 18—to eliminate monthly premium increases for about one in four Medicare beneficiaries next year. Lawmakers said older Americans should not have to pay higher Medicare Part B premiums in 2010 because for the first time in 35 years, they will receive no cost-of-living adjustments (COLA) in their Social Security checks.

The bill now goes to the Senate, where a vote on the measure is expected soon.

About 42 million older Americans and people with disabilities are enrolled in Medicare Part B, which provides coverage for doctors’ visits. The vast majority of Medicare recipients already are exempt from Part B premium increases in 2010 because of a “hold-harmless” provision that kicks in when there is no increase in Social Security. But that protection does not apply to about 11 million beneficiaries who:

  • do not have their Part B premiums withheld from their Social Security checks, or
  • pay a higher Part B premium based on higher income, or
  • are newly enrolled in Part B.

These beneficiaries would face monthly premium increases of $8 to $23 without congressional action. The standard monthly premium is $96.40 this year.

The result would be two levels of charges even for basic Part B premiums—the lower amount paid by three-fourths of enrollees, and the higher amount borne by the remaining fourth.

AARP Executive Vice President Nancy LeaMond applauded the House action and urged quick Senate approval of the bill.

LeaMond said that by holding Medicare premiums steady for all beneficiaries for the next year—premiums that have doubled since 2000—the bill “would help ensure that health care is more affordable for people in Medicare—without burdening taxpayers or future generations with new spending.”

The Social Security Administration projects no cost-of-living increases for the next two years because the adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.

“As health care costs continue to soar despite lower inflation throughout the economy, older Americans are hit particularly hard,” LeaMond says. “Retirees have seen their savings wiped away by market losses while their health care bills continue to climb.”

Men and women in Medicare today spend nearly a third of their income on health care, Leamond says. “The lack of a cost-of-living update in Social Security means that millions more in Medicare could see their health care costs rise further out of reach.”

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