News Intelligence Analysis
A Fix to Part of the Medicare Prescription Drug Benefit
By Senator Maria Cantwell
July 22, 2004
Social Security benefits include a modest annual cost-of living adjustment (COLA) to protect beneficiaries from inflation and the rising costs of basic necessities such as housing, electricity, and groceries. For individuals participating in Medicare Part B, the current voluntary program that covers physician care, a portion of each month's Social Security check is withheld to pay for the monthly premium. The premium is adjusted annually and is based on the estimated average cost for an individual enrolled in Part B. In 1986, a "hold harmless" provision was created to ensure that an increase in the Part B premium would not exceed the beneficiary's COLA.
Like Part B, the new Medicare Prescription Drug benefit (Part D) is a voluntary program with a monthly premium that is covered through a portion of a Medicare beneficiary's monthly Social Security check. The Part D premium is also based on the estimated average cost for an individual participant. However, unlike Part B, Part D beneficiaries are not protected by a "hold harmless" provision. Consequently, with the escalating cost of prescription medications, a Joint Economic Committee report that came out on Wednesday, July 21 finds that seniors and people with disabilities who choose to participate in the Medicare Part D program may be subject to the possibility of a premium that far exceeds their annual COLA.
For those who voluntarily elect to participate in the new Medicare Part D prescription drug coverage program, I strongly believe that there is no reason that having this coverage should consequently have a negative affect on one's Social Security benefits. I am opposed to any Congressional action that would reduce benefits and put millions of Americans at risk of losing the fundamental protections that Social Security was created to provide.
It is for this reason that I cosponsored the Social Security COLA Protection Act of 2004 (S. 2754) introduced yesterday, July 22, 2004. This bill would guarantee that no more than 25 percent of a beneficiary's COLA could be withheld to cover increases in any Medicare premiums. Estimates show that this bill would help approximately 14 million Social Security beneficiaries in 2007, and approximately 23 million Americans-over two-thirds of all seniors and people with disabilities-by 2014.
I strongly believe that should Medicare beneficiaries choose to participate in the new Medicare Part D program that the benefit should not undermine their Social Security benefits. Please be assured that I will continue to fight to protect Social Security and Medicare benefits for Washington seniors and people with disabilities.
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