Congressional Democratic leaders yesterday said the Medicare prescription-drug bill passed last year could limit future Social Security benefits, and some charged that it was a deliberate effort by Republicans to set the stage for partially privatizing the federal retirement program.
“Seniors’ Social Security cost-of-living adjustments [COLA] and benefits are under attack from Republicans,” said Rep. Pete Stark, California Democrat. “This is one more step in the Republicans’ plan to ignore Social Security benefits and try to privatize it. … This is terrorism enacted against our seniors.”
Mr. Stark, a member of the House Joint Economic Committee, issued a report illustrating how deductions in Social Security payments to cover Medicare prescription-drug benefits (Part D benefits) have no safeguards against inflation, unlike deductions for doctors’ care (Part B premiums).
The Part D deductions, the report says, will outpace cost-of-living increases applied annually to Social Security benefits by 2007. The deductions for Part B premiums are under a “hold-harmless” rule to prevent them from rising above the COLA.
Democratic leaders called the problem an oversight by Republicans in their rush to pass a prescription-drug bill.
“This is exactly what happens when decisions are made in the dark of night,” said Senate Minority Leader Tom Daschle, South Dakota Democrat.
House Minority Leader Nancy Pelosi, California Democrat, called the Medicare bill a “cruel hoax” on seniors and said Democrats are working to repeal and replace the Republican-sponsored bill.
“Making drug prices more affordable is a big part of our bill, by giving the secretary of health and human services the ability to negotiate lower prices,” Mrs. Pelosi said. “This would all be done under Medicare so that it is guaranteed and affordable for seniors.”
Sen. Charles E. Grassley, Iowa Republican and Finance Committee chairman, said the Democrats’ analysis is flawed.
Mr. Grassley said the Democrats failed to take into consideration that the cost-of-living increases over the next 10 years will be much larger than any premiums for Part B and Part D benefits combined in 2004.
Because the Medicare bill passed after the start of the 2004 fiscal year and has yet to be fully implemented, he said, factoring in or changing COLA on the premiums today is premature.
“Moreover, assuming this beneficiary is relying solely on Social Security income of less than $400 per month, this individual’s Part B and Part D premiums would be covered by the government because of their low income, so their Social Security COLA would be unaffected,” Mr. Grassley added.
Rep. Robert T. Matsui, California Democrat, said the increases in Part B and D Medicare deductions from Social Security payments would most negatively affect women, low-income seniors and minorities.
“Twenty-five percent of women retirees rely on Social Security for 90 percent of their income, 67 percent of African-American retirees and 78 percent of Hispanic retirees have no pension other than Social Security,” Mr. Matsui said.
Bush administration officials said the report was faulty and that the alternative would be no drug coverage at all.
“If not for the new Medicare law, seniors without drug coverage would continue to pay the highest prices for their medicines. For the first time, all beneficiaries will have guaranteed access to Medicare drug coverage,” Medicare chief Mark B. McClellan said.
Mr. McClellan said one-third of all beneficiaries with limited incomes will pay low or no premiums or deductibles for their new drug benefit — “and no premium means no premium increase to hold harmless.”
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