February 22, 2019

The Honorable Katie Hill
1130 Longworth House Office Bldg.
Washington, DC 20515

Dear Representative Hill:

On behalf of the National Committee to Preserve Social Security and Medicare’s millions of members and supporters, I write to strongly support your legislation, the Medicare Part B Penalties Fairness Act.

Currently, if seniors do not enroll in Medicare Part B when first eligible, their monthly premium can go up 10% for each 12-month period that they could have signed up but didn’t. This penalty must be paid for as long as a beneficiary has Part B. The trouble is, Medicare enrollment can be complicated and people new to Medicare often don’t sign up because they didn’t understand complicated enrollment rules. Approximately 700,000 Medicare beneficiaries pay this penalty. Your bill would help ease the burden for people who unwittingly make Medicare enrollment mistakes by capping the period for accrual of the penalty at two years, so the penalty amount doesn’t continue to climb higher.

This proposal also fixes a confusing—and too commonly misunderstood—rule related to COBRA coverage. Under current rules, people who delay enrolling in Part B who have coverage through a current employer do not incur a Part B penalty.  But when beneficiaries leave their employment and maintain their same insurance through COBRA, their insurance coverage does not qualify for purposes of avoiding a Part B enrollment penalty even if they faithfully pay their COBRA premium.

Your bill eliminates this confusing rule by allowing COBRA coverage to count as creditable coverage for purposing of assessing the Part B penalty. This change will prevent individuals who maintain COBRA coverage through a former employer from having to pay the Part B penalty for the rest of the time they are covered under Part B. This important legislation will make the confusing rules around Part B a little fairer and less onerous for beneficiaries. We therefore strongly support the Medicare Part B Penalties Fairness Act and thank you for your work on this important issue.

Sincerely,

Max Richtman
President and CEO