2015-10-09 National Governors Association

Medicare Part B

The Honorable John Boehner
Speaker
U.S. House of Representatives
Washington, D.C. 20515

The Honorable Nancy Pelosi
Democratic Leader
U.S. House of Representatives
Washington, D.C. 20515

The Honorable Mitch McConnell
Majority Leader
U.S. Senate
Washington, D.C. 20510

The Honorable Harry Reid
Democratic Leader
U.S. Senate
Washington, D.C. 20510

Dear Speaker Boehner, Leader Pelosi, Majority Leader McConnell and Leader Reid:

Governors call on Congress to find a fiscally responsible solution to help mitigate the projected $2.3 billion increase in Medicare Part B premiums for states in 2016.

The Medicare Trustees project a 52 percent increase in Part B premiums next year for beneficiaries—most of whom are dually eligible for Medicare and Medicaid—not covered by a hold harmless provision in the Social Security Act. The hold harmless provision protects approximately 70 percent of Part B beneficiaries from premium increases that exceed the Social Security Cost of Living Adjustment (COLA). With no COLA expected next year, Part B premium increases will be spread among the remaining beneficiaries to ensure premiums cover 25 percent of program costs, as required by law. State Medicaid programs, which pay all or a portion of Part B premiums for dual eligibles, will be forced to absorb a disproportionate share of rising Medicare costs.

Governors urge you to address the unintended consequences of applying the hold harmless provision when Part B premiums increase faster than Social Security benefits. The cost of protecting Medicare beneficiaries should be borne by the federal government rather than placed on the backs of states.

Sincerely,

Dan Crippen