No COLA This Year, But Maybe This

From Congressional Quarterly:

House Democrats could move legislation as early as this week to prevent Medicare premiums from rising sharply for certain senior citizens.

Democratic leaders have not decided whether to move the bill, with an estimated cost of $2.1 billion, as a stand-alone measure or as part of a stopgap spending bill to keep the government funded through the end of October. The House may vote on that measure Thursday.

The problem lawmakers want to address arises from the likelihood that Social Security recipients will not get a cost-of-living adjustment (COLA) in their benefits next year for the first time in 35 years.

At the same time, premiums for Medicare Part B, which covers physician services and outpatient care, are expected to rise. Because Part B premiums are typically deducted from monthly Social Security checks, the lack of a COLA next year will mean an effective reduction in benefits for a minority of seniors.

A "hold harmless" provision in federal law would shield about 75 percent of Medicare beneficiaries from having to pay the Part B premium increase if there is no increase in their Social Security benefits.

But the remaining 25 percent -- a group that includes seniors newly qualifying for Medicare -- would not only have to shoulder a Part B premium increase, but they also would have to pay a portion of the increased premiums the government isn't able to collect from seniors held harmless. Those who would be stuck with the bill are low-income seniors who receive benefits from both Medicare and Medicaid; seniors with incomes above $85,000 if they are single and $170,000 for couples; and people who are new to the program.