A group of Democratic senators introduced a new bill on Thursday that would create a $5,000 cap on out-of-pocket costs for traditional Medicare beneficiaries.
The Medicare Cost Cap Act was introduced by Senator Lisa Blunt Rochester (D-Delaware), Senate Finance Committee Ranking Member Ron Wyden (D-Oregon) and Senate Democratic Leader Chuck Schumer (D-New York).
The bill seeks to “level the playing field” between traditional Medicare and Medicare Advantage, which has annual out-of-pocket spending caps (as do employer-sponsored insurance and coverage bought on the marketplace).
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In traditional Medicare, which does not currently have an out-of-pocket cap, it’s estimated that over the next 10 years, 52% of beneficiaries are anticipated to surpass the proposed $5,000 cap at least once, according to the announcement. The bill would benefit 3.2 million Medicare enrollees in 2028, and save enrollees $1,024 per year on average, the senators declared.
In addition to creating an out-of-pocket cap, the bill also seeks to protect low-income seniors — who “rely almost exclusively” on Social Security benefits — from rising premiums and cost-sharing. The announcement notes that Medicare Part B premiums topped $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,” Blunt Rochester said in a statement. “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.”
Additional co-sponsors of the bill include Senators Jeff Merkley (D-Oregon), Ben Ray Luján (D-New Mexico), Edward J. Markey (D-Massachusetts), Elizabeth Warren (D-Massachusetts), Jack Reed (D-Rhode Island), Tammy Duckworth (D-Illinois), Peter Welch (D-Vermont), Cory Booker (D-New Jersey), Kirsten Gillibrand (D-New York), Alex Padilla (D-California), Chris Van Hollen (D-Maryland) and Patty Murray (D-Washington).
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Several advocacy groups endorsed the bill, including Families USA, the National Council on Aging and the Center for Medicare Advocacy.
“This bill would be an important first step towards bringing Traditional Medicare in line with other health insurance coverage by adding an out-of-pocket cap as well as starting to rebalance the traditional program with private Medicare Advantage,” said David Lipschutz, co-director of the Center for Medicare Advocacy, in a statement. “Further, making it easier to qualify for Medicare Savings Programs will make Medicare more affordable for more people.”
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