By Daisy Brown, TSCL Legislative Liaison
Q: What Does TSCL Support To Make Medicare And Social Security Benefits More Adequate?
A: Keeping Medicare affordable while providing effective, high-quality care often tops TSCL’s to-do list for lawmakers in Congress. When starting Medicare for the first time, beneficiaries look forward to saving money on healthcare costs, and for some, getting long-postponed medical care. But Medicare alone comes with high out-of-pocket costs and uncovered care. To lower their financial risk, most beneficiaries must either join Medicare Advantage plans or purchase a Medicare supplement (Medigap) insurance to help lower out-of-pocket costs. TSCL believes Medicare could be strengthened in several ways that would lower costs for both the government and beneficiaries.
Q: What options does TSCL support to lower Medicare costs?
A: Slowing the growth of costs in Medicare Part B which pays for doctors and outpatient care also slows the growth of Part B premiums. Medicare Part B premiums, which are automatically deducted from Social Security benefits, are generally the fastest growing cost in retirement. Many of you tell us that the annual Part B premium increase frequently takes most, or even all, of your annual COLA.
The drop in Part B premiums from $170.10 in 2022, to $164.90 for 2023 ($5.10 per month), occurred in part due to public outcry by TSCL and other senior advocates that put the brakes on wasteful Medicare spending. In 2022, we drew the attention of Congress and Medicare to the out-sized share of the Part B premium increase that was attributable to the cost of a single pricey Alzheimer’s drug — Aduhelm. At the time when the 14.5% Medicare Part B premium increase was announced for 2022, that drug was priced at $56,000 per year and had not received approval for coverage by Medicare. The price of Aduhelm was subsequently cut in half by the manufacturer, and Medicare determined that the drug would only be covered under restricted use. That led to a re-examination of the 2022 Part B premium, and the savings were used to reduce Part B premiums in 2023. We think Congress should look for more savings like this.
Q: Where should Congress look next?
A: Congress should take a closer look at reimbursements of Medicare Advantage health plans. Private insurers who administer Medicare Advantage plans have come under investigation by the federal government in recent years for inflating patient “risk scores.” The practice is used to make health plan enrollees appear sicker than their medical records may indicate, to receive higher reimbursements from Medicare. The inflated wasteful payments received by Medicare Advantage plans increase Part B costs and subsequently Part B premiums — even for beneficiaries who are not enrolled in a Medicare Advantage plan. Reducing these costs would slow the growth in Medicare Part B, saving money for both beneficiaries and taxpayers.
Q: What do you propose to make Social Security benefits more adequate?
A: TSCL would like to see stronger protection from rising Medicare costs by calculating the annual Social Security COLA using a consumer price index that better accounts for rising Medicare premiums. One of the biggest shortcomings of the current method of calculating the annual COLA is the price index used to calculate the percentage of change.
The COLA is determined using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) — a poor choice for calculating the cost of living for older and retired Social Security recipients. The CPI-W represents the spending patterns of younger working adults, and it specifically excludes the inflation experienced by retired and disabled adults aged 62 and up who are covered by Medicare. Thus, the current COLA never keeps up with rising Medicare costs, because those costs are not surveyed for the CPI-W.
From 2013 to 2022, Medicare premiums routinely increased three times faster than the COLA. Social Security benefits grew by 18.8 percentage points while Medicare premiums grew by 57.2 percentage points. Surveys by TSCL have found that Social Security recipients overwhelming support tying the annual inflation adjustment to a “seniors’” CPI that more fairly represents the spending patterns of older and disabled adults who receive Medicare.
One last word, TSCL says thanks to all of you who have donated to TSCL, joined the organization, participated in our surveys, signed petitions, sent in your stories and comments. We look forward to a busy 2023 as a new Congress gets underway!