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About Stephanie |
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FOR IMMEDIATE RELEASE Daschle, Herseth Want to Protect Social Security COLAs Rising Medicare premiums would reduce future increases in Social Security July 21, 2004, Washington, DC – Senator Tom Daschle and Representative Stephanie Herseth announced plans at a Capitol Hill news conference today to introduce legislation to protect Social Security cost-of-living adjustments seniors receive. The legislation responds to a newly identified problem with the Republican Medicare Prescription Drug Bill. “Over the last eight months, South Dakotans have told me about problem after problem with the Medicare bill from prohibiting the Federal government from negotiating drug prices with drug companies to causing millions of Americans to lose insurance coverage,” Senator Daschle said. “Today, we’ve discovered another enormous problem. We cannot stand by and allow seniors to lose the cost-of-living increases they receive under Social Security, as a result of their participation in the prescription drug benefit.” “Seniors in South Dakota are facing serious financial challenges, and this year they will see the largest increase in Medicare premiums ever,” Herseth said. “I am proud to introduce this bill as the first legislation I am sponsoring in the House because it provides real benefits to retirees and ensures that their COLA isn’t completely absorbed by rising health care costs.” Daschle and Herseth cited a report from the nonpartisan Joint Economic Committee that shows the new Medicare “Part D” premium—the prescription drug benefit-- will not prevent rising premiums from cutting into seniors’ cost of living adjustments (COLAs). Currently, seniors have their premiums for existing Medicare Part B benefits deducted from their Social Security checks. The same will be true of Part D drug premiums. Current law includes a protection to ensure that the Part B premium increases do not exceed a senior’s COLA. Republicans omitted this crucial protection when drafting the Medicare Drug Benefit. Therefore, over time, as drug costs increase, and Part D premiums rise, seniors will lose a growing percentage of their annual Social Security benefit. By 2007, one year after the law takes effect, one in four seniors will lose a quarter of their COLAs. In 10 years, a senior with a monthly benefit of $500, will lose two-thirds of his or her COLA. Eventually, seniors would actually see their Social Security checks shrink from year to year as premium increases overcome the COLA. The bill Daschle and Herseth plan to introduce later this week, the Social Security COLA Protection Act of 2004, would restore seniors’ protections and ensure that no more than 25 percent of their annual COLA could be erased by increases in Medicare premiums. For a senior citizen receiving a $600 monthly benefit, this bill would protect more than $2,200 over the next 10 years. The National Committee to Preserve Social Security and Medicare endorsed Daschle and Herseth’s push to introduce legislation to protect Social Security COLAs. Senator Tim Johnson is also a cosponsor of this legislation.
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