Blunt Rochester, Wyden, Schumer Lead Legislation To Cap Medicare Costs for Seniors

Blunt Rochester, Wyden, Schumer Lead Legislation To Cap Medicare Costs for Seniors

The Medicare Cost Cap Act Will Create a $5,000 Ceiling on Out-of-Pocket Costs for People with Traditional Medicare and Protect Low-Income Seniors

Fact Sheet for the Bill (PDF)

Washington, D.C. - U.S. Senator Lisa Blunt Rochester, D-Del., Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senate Democratic Leader Chuck Schumer, D-N.Y., today introduced the Medicare Cost Cap Act, which will 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 are 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.

"Americans spend their entire working lives paying into Medicare but those with Traditional Medicare are the only group not protected from financial ruin. This bill modernizes Medicare, lowers costs, and brings peace of mind to the millions of seniors and those with disabilities who rely on this program," said Blunt Rochester. "No one should be one health emergency away from going bankrupt and establishing an out-of-pocket cap in Traditional Medicare gives more seniors and those with disabilities the same financial protections that almost every other American enjoys."

"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 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."

"Donald Trump and Republicans have taken a sledgehammer to our health care, enacting the largest cuts to care in history last year and leaving too many Americans unable to pay for essential and lifesaving care," said Leader Schumer. "Senate Democrats are fighting back - our legislation to lower out-of-pocket costs for seniors with Medicare is more important than ever. No one should go bankrupt because they need medical care or face a devastating diagnosis."

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% of beneficiaries are expected to exceed the proposed $5,000 cap at least once. On average, this plan would save enrollees $1,024 per year.

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 that rely exclusively on Social Security for their income.

Additional members co-sponsoring the legislation include Senators Jeff Merkley, D-Ore.; Ben Ray Luján, D-N.M.; Edward J. Markey, D-Mass.; Elizabeth Warren, D-Mass.; Jack Reed, D-R.I.; Tammy Duckworth, D-Ill.; Peter Welch, D-Vt.; Cory Booker, D-N.J.; Kirsten Gillibrand, D-N.Y.; Alex Padilla, D-Calif.; Chris Van Hollen, D-Md.; and Patty Murray, D-Wash.

A list of endorsing organizations can be found here. Statements of support for the legislation can be found here.

The senators 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.

A fact sheet for the bill is here. The text of the bill is here.

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