Update for Week Ending July 24, 2021

Update for Week Ending July 24, 2021

TSCL Endorses Social Security Legislation

Last week TSCL was contacted by the office of Rep. Al Lawson (D-Fla.), to ask if we would once again endorse his bill, the Social Security for Future Generations Act. The Congressman first introduced his bill in 2019 but because it did not pass at that time he has now reintroduced it.

This legislation would make targeted benefits increases to students and widow(ers), update the cost-of-living adjustments formula (COLAs) to all beneficiaries, and will close a tax loophole that allows the wealthiest Americans to pay a lower Social Security tax rate.

It includes the following provisions:

  • Extension of Student Benefit to Age 22: Social Security provides benefits directly to about 3 million dependents under age 18 who have lost parental support because of death, disability, or retirement. Originally, this benefit was extended to dependents up to age 22, but that ceased after April 1985. This provision will reinstate benefits for dependents enrolled in college, up to age 22 so that they can afford skyrocketing tuition and college costs.
  • Updated Benefit Formula for Widow and Widowers: Under the current benefit formula, Social Security benefits at widow(er)hood will be one-third to one-half less than the combined benefits to the couple. This provision would ensure that benefits are directed toward a vulnerable group of women (and men), so that they receive a minimum amount of Social Security retirement in the case of spousal death.
  • COLA Adjustment: CPI-E is a more accurate measure of spending that is produced by the Department of Labor. This measure is projected to increase the annual COLA benefit by ~0.2 percentage points, on average. An average senior at the age of 80 could see a $43 a month increase, while the average senior at age 90 could see a $73 a month increase in benefits.
  • Apply Payroll Tax to Wages above $250K: Currently, there is a maximum amount of earnings ($127,200 in 2017) that can be taxed; any earnings above this taxable maximum are not subject to the payroll tax. According to the Center for Economic Policy Research, subjecting all income over $250,000 to the Social Security payroll tax would impact only an estimated top 1.5 percent of wage earners.
  • Special Minimum Benefit: This is alternative benefit formula increases benefits paid to workers who had low earnings and who have worked long enough to secure Social Security retirement. This provision will ensure low-income workers qualify for benefits.

TSCL has once again endorsed this important legislation and we are grateful to the Congressman for his authorship of the bill.

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Changes Designed to Stop “Surprise Billing” Coming Next Year

Last year TSCL supported legislation to stop “surprise billing,” which happened when patients were billed for medical procedures they had thought were covered by their health care insurance, but actually were not.

Congress passed the legislation and it will go into effect next year.  While surprise billing happened more frequently to those who were covered by employer-provided insurance, it did happen occasionally to those covered by Medicare.

New information has just come out about what changes can be expected starting January 1 of next year.

All health care providers must make information on patients’ rights with respect to balance billing publicly available.

Health plans are expected to share more information on their websites explaining surprise billing (when a patient is responsible for an amount over what a health plan pays). Plus, health plan ID cards will show deductibles and out-of-pocket maximums.  We assume these new changes will also apply to Medicare although we have not seen information specifically about that.

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Congress Still Trying to Find a Way to Pass Health Care Legislation

As we explained last week, the parameters of whatever new health care legislation is passed by Congress this year have been laid out by the Democratic majorities in both houses of Congress.  We cover these Democratic proposals because they hold the majorities in Congress (although very narrow majorities) and therefore they set the agenda just as Republicans did when they held the majorities.

According to Bloomberg News, the Democrats’ ambitious plans to add new benefits to Medicare and improve other health care benefits this year hinge on delivering a major drug pricing package.

Democrats in the Senate are working on passing a $3.5 trillion legislative package that includes their main health care priorities through a budget process known as “reconciliation” that will allow them to pass it without Republican support since they don’t expect any Republicans to support the legislation. The multi-trillion-dollar legislative package could include expanding Medicare and Medicaid as well as extending enhanced insurance subsidies for people on the Affordable Care Act’s exchanges.

To offset at least some of the cost, lawmakers have proposed authorizing the government to negotiate with drug makers, as well as other changes to lower the price of medicines. But a failure to win big on drug pricing means Democrats won’t deliver much of their promised health agenda, lawmakers say.

However, their first problem is coming up with legislation that all Democrats will support, and they are not there yet.

Sen. Bob Menendez (D-N.J.) has said that in discussions with colleagues he’s made clear he’ll judge any drug pricing legislation by what it saves consumers, not by what it could potentially buy lawmakers.

“My whole focus on the question of prescription drugs has been: how do we ensure that the consumer pays lower prices,” he said. “Saving the government is one thing, but that does nothing at the end of the day to help the consumer at the counter.”

Menendez, who represents a state that’s home to pharmaceutical giants, has voted against drug price negotiation legislation in the past but didn’t rule out supporting it in the future. He recently introduced a bill with Sen. Bill Cassidy (R-La.) to cap what seniors in Medicare pay for medicines each year.

That legislation would alter how Medicare, insurers, and drug makers split the cost of paying for drugs once beneficiaries hit their annual limit, putting more of the cost onto industry. This shift is meant to encourage insurers to pressure drug makers to lower their prices overall.

CBO estimated that a similar redesign of Medicare’s prescription drug benefit, where out-of-pocket costs are capped and insurers are pushed to negotiate for better deals, would save the government $3.39 billion.

Meanwhile Senate Finance Chairman Ron Wyden (D-Ore.) said he wants to pass a government negotiation bill that includes a slate of other drug pricing items.

His job this summer is to win over his colleagues and find common ground.

“I’m going to spend day after day this summer working on these discussions,” Wyden said.

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As we continue recovering from the Covid 19 pandemic, TSCL remains constant in our fight for you to protect your Social Security, Medicare, and Medicaid benefits.  We’ve had to make some adjustments in the way we carry on our work, but we have not, and will not stop our work on your behalf.

For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit the our website at www.SeniorsLeague.org, follow TSCL on Twitter or Facebook.