TSCL Presses For More Fair COLAs
The government will announce Medicare premiums and deductibles for 2006 later in October. TSCL expects that hefty Medicare premium rate hikes will take a painful bite out of retirees' 2006 Cost-of-Living Adjustment (COLA). In fact, seniors who have   a low benefit of less than about $400 per month may see their entire COLA obliterated by the Medicare Part B premium increase. Earlier this year, Administration officials said that beneficiaries would pay a monthly Medicare Part B premium of at least $89.20 - an increase of $11 from the current premium of $78.20.

Other new Medicare cost increases are also likely to take a growing portion of seniors' Social Security benefits. The annual Medicare Part B deductible will increase again. In 2005 the deductible increased $10 after staying at $100 since 1991. The new Medicare prescription drug legislation, however, required that the Part B deductible increase at the same rate as the Medicare premium. Thus, if the Medicare Part B premium increases about 15% as predicted, the deductible will increase about $16, rising from $110 to about $126 in 2006. And these costs don't even cover the new Medicare Part "D" prescription drug benefit.

Meanwhile, based on the latest Bureau of Labor Statistics data, the COLA is likely to be very close to the one received in 2005, about 2.7%. [To be confirmed closer to press date.] Clearly, the system is out of kilter.

One particularly problematic factor responsible for driving up Medicare premiums has been a jump in improper payments due to waste, fraud, and abuse to near-record high levels. (To read more about this see "Fraud Bilking Medicare, Driving Up Costs for Seniors," in the August 2005 issue.) Last year, the Centers for Medicare and Medicaid Services reported that nearly 1 in every 10 claims is paid in error, amounting to $20.8 billion in improper payments in fiscal year 2004 alone. TSCL believes that enacting and enforcing stronger measures to fight and prevent waste, fraud and abuse are essential for putting a lid on the rise in premiums and deductibles. TSCL is also fighting for a more fair COLA and supports "The Consumer Price Index for Elderly Consumers Act " (S. 275), introduced by Senator Maria Cantwell (WA).

Sources: "Medicare Says '06 Premiums Will Rise $11," Robert Pear, The New York Times, April 1, 2005. Medicare Eating Into Social Security Benefit, Scott Burns, Universal Press Syndicate, April 9, 2005. Consumer Price Index through June 2005, Bureau of Labor Statistics, July 14, 2005. "FY 2004 Improper Medicare Fee-For-Service Payment Report, Executive Version," CMS, December 13, 2004.

October 2005