Reed Offers Prescription to Cap Medicare Costs for Seniors

WASHINGTON, DC - Noting that a cancer diagnosis or a long hospital stay for a serious medical condition should not force older Americans into financial ruin, U.S. Senator Jack Reed is teaming up with Senate Finance Committee Ranking Member Ron Wyden (D-OR) in introducing the Medicare Cost Cap Act, which would create a $5,000 cap on out-of-pocket costs for Traditional Medicare (Parts A and B) beneficiaries.

Currently, Traditional Medicare does not have a limit on out-of-pocket costs, meaning beneficiaries could be confronted with unlimited, catastrophic health care costs if they face serious illness or hospitalization. Medicare Advantage (MA), employer-sponsored insurance, and insurance bought on the marketplace all have annual caps on out-of-pocket spending. An out-of-pocket cap will level the playing field between Traditional Medicare and MA and guarantee that all people with Medicare are protected, no matter what coverage option they choose.

The legislation also enhances programs that protect low-income Medicare beneficiaries, shielding seniors and people with disabilities who already rely almost exclusively on their Social Security benefits from rising premiums and out-of-pocket costs. Under the Trump Administration's watch, Medicare Part B premiums exceeded $200 for the first time last year.

"Traditional Medicare is America's flagship health care program, and it must be strengthened for the millions of seniors who count on it for affordable care," said Senator Wyden. "This legislation will put an end to the financial nightmare facing too many seniors with Traditional Medicare who experience a major medical event. Nobody should go broke to get the health care they need, especially seniors who have paid into Medicare with each paycheck during their working years."

"As more Americans struggle with high costs and the Trump Administration slashes billions from Medicare and health care, this bill would ensure Traditional Medicare is a more affordable, competitive option. Older Americans should not have to break the bank or go broke if they contract a serious illness or require a long hospital stay. This commonsense solution would stop patients from getting financially overwhelmed. It would bring Traditional Medicare in line with other health insurance coverage and protect people from going broke by limiting out-of-pocket expenses for everyone with Medicare," said Senator Reed.

In 2028, 3.2 million Medicare beneficiaries are projected to directly benefit from an out-of-pocket cost cap. Over the next ten years, over 52 percent of beneficiaries are expected to exceed the proposed $5,000 cap at least once. On average, this plan could save enrollees about $1,200 per year, according to a recent study by Brown University.

While financial support does exist for low-income Medicare enrollees, oftentimes confusing and extensive administrative barriers prevent and discourage beneficiaries from accessing these resources. These barriers adversely affect low-income seniors who struggle to afford health care. Over half a million enrollees who qualify for Medicare Savings Programs (MSPs) are not enrolled, leading to missed benefits and higher out-of-pocket costs for some of the most financially insecure Americans. In addition to creating an out-of-pocket cap, the legislation will improve assistance for low-income beneficiaries, such as seniors who rely exclusively on Social Security for their income.

In addition to Wyden and Reed, the legislation is cosponsored by U.S. Senators Lisa Blunt Rochester (D-DE), Jeff Merkley (D-OR), Ben Ray Luján (D-NM), Edward J. Markey (D-MA), Elizabeth Warren (D-MA), Chuck Schumer (D-NY), Tammy Duckworth (D-IL), Peter Welch (D-VT), Cory Booker (D-NJ), Kirsten Gillibrand (D-NY), Alex Padilla (D-CA), Chris Van Hollen (D-MD) and Patty Murray (D-WA).

The legislation has been endorsed by dozens of organizations, including: American Association of Service Coordinators; American Geriatrics Society; American Society on Aging; Caring Across Generations; Center for Medicare Advocacy; Families USA; Just Care USA; Justice in Aging; Leading Age; Medicare Rights Center; National Academy of Elder Law Attorneys National Adult Day Services Association; National Alliance for Caregiving; National Committee to Preserve Social Security and Medicare; National Council on Aging; Protect Our Care; and Social Security Works.

Democrats have a proven track record of cutting costs for all Medicare enrollees. During the Biden-Harris Administration, Democrats secured a $2,000 out-of-pocket cap on prescription drug costs in Medicare Part D plans, a $35 monthly cap on insulin co-pays, and no cost-vaccines for seniors and people with disabilities on Medicare.

• Print
• Email
• Share
• Tweet