The Senior Citizens League (TSCL) Monthly Washington Update
for April 2025
The Congressional Budget Office (CBO) released its latest long-term outlook, raising alarms about the sustainability of Social Security and Medicare. With the aging population, costs for these programs are expected to skyrocket in the coming decades, leading to concerns that benefits may be reduced or taxes may need to rise to keep them solvent. This has sparked renewed debate in Congress about reforming both programs to ensure they remain financially stable for future retirees.
---
Medicare
Surprisingly, the Congressional Budget Office (CBO) has projected that Medicare's Hospital Insurance (HI) Trust Fund will remain solvent until 2052, extending the previous estimate of 2030. This extension is attributed to stronger economic growth, higher payroll tax revenues, and lower-than-expected healthcare spending. However, the CBO also warns that, without legislative action, Medicare will face a 6.4% benefit reduction in 2053, escalating to 6.9% by 2055, unless reforms are implemented to align expenditures with revenues.
In contrast, the Supplementary Medical Insurance (SMI) Trust Fund, which covers Medicare Parts B and D, is projected to remain solvent indefinitely due to its funding structure, which adjusts premiums and federal contributions annually to meet costs.
Negotiations are taking place for the prices of 15 high-cost prescription drugs under Medicare to reduce beneficiaries' costs. These new negotiated prices are expected to take effect in 2027 as part of the Inflation Reduction Act, which aims to lower prescription drug prices through direct negotiations between Medicare and pharmaceutical companies.
The drugs chosen for negotiation include:
• Ozempic, Rybelsus, Wegovy
• Trelegy Ellipta
• Xtandi
• Pomalyst
• Ibrance
• Ofev
• Linzess
• Calquence
• Austedo, Austedo XR
• Breo Ellipta
• Tradjenta
• Xifaxan
• Vraylar
• Janumet, Janumet XR
• Otezla
Looking ahead, Medicare plans to negotiate prices for additional drugs in the following years:
• 15 drugs under Part B and Part D in 2026, with new prices taking effect in 2028.
• 20 drugs under Part B and Part D in 2027, with new prices set for 2029.
• 20 drugs under Part B and Part D each year starting in 2028.
Manufacturers who fail to comply with the negotiation guidelines will be subject to tax and penalties for not meeting other Medicare requirements.
As we move through the year, the issue of prescription drug affordability for seniors is unlikely to go away anytime soon. While there have been significant strides in tackling high drug prices, especially through Medicare negotiations, more work is needed to ensure that the most vulnerable populations, including seniors, can access the medications they need without fear of going broke. Advocacy groups, such as The Senior Citizens League (TSCL), continue to push for further reforms, including expanding Medicare’s bargaining power and more robust cost control measures in the pharmaceutical industry.
The ongoing increase in healthcare expenses continues to be a primary concern for seniors and budget hawks.
Social Security
In April 2025, several significant legislative actions and policy changes impacted Social Security, particularly concerning overpayment recovery, identity verification, and the taxation of Social Security Income.
Overpayment Recovery Policy Adjustments
The SSA reversed its controversial policy of recovering 100% of overpaid benefits, often due to agency errors, which had caused financial hardship for many seniors. Effective April 25, 2025, the recovery rate was reduced to 50%, offering partial relief to beneficiaries. Despite this adjustment, advocates argue that the new policy still imposes undue hardship, especially on Social Security Disability Insurance (SSDI) recipients.
TSCL believes overpayments should be recouped, but remains concerned about the impact of any recovery rate on the less financially stable retirees. For some retirees, it won't matter if it's 1% or 100%. Any amount of clawback could be catastrophic for them.
TSCL emphasizes that retirees affected by a clawback payment can request a lower repayment rate if they cannot afford the 50% deduction. They also have the right to appeal the overpayment decision or the amount. Additionally, retirees can apply for a waiver if repaying the overpayment would cause financial hardship. These options provide relief and flexibility for those struggling to manage the deductions.
Identity Verification Policy Changes
On March 18th, the Social Security Administration announced that individuals who could not use their personal My Social Security account, which requires online identity proofing, would be required to visit a local Social Security office to prove their identity in person.
That decision was reversed effective April 14, with the following statement from SSA.
“We have listened to our customers, Congress, advocates, and others, and we are updating our policy to provide better customer service to the country’s most vulnerable populations,” said Lee Dudek, Acting Commissioner of Social Security. “In addition to extending the policy’s effective date by two weeks to ensure our employees have the training they need to help customers, Medicare, Disability, and SSI applications will be exempt from in-person identity proofing because multiple opportunities exist during the decision process to verify a person’s identity.”
No Taxes on Social Security Income
Discussions on the taxation of Social Security benefits have gained momentum on Capitol Hill. Several lawmakers are pushing for legislation to remove taxes on retirees' Social Security income.
Social Security benefits are taxable for individuals earning above certain income thresholds, which can significantly reduce benefits. Proposals to remove taxes on Social Security income aim to provide greater financial relief to seniors, particularly those relying on Social Security as their primary source of income.
---
Looking ahead, Social Security and Medicare remain major topics in Congress. While progress is being made on lowering prescription drug costs and addressing funding issues, more work is needed to ensure these programs remain strong. Recent changes like reducing recovery of overpayment and adjusting identity verification show that lawmakers are trying to make things easier for beneficiaries. There’s also growing momentum around proposals to remove taxes on Social Security benefits, which could offer relief for retirees. With more reforms likely on the horizon, these programs will continue to be a key focus in the coming months.
