December 1, 2020
On behalf of the National Committee to Preserve Social Security and Medicare’s millions of members and supporters, I am writing to urge you and your colleagues to prioritize the needs of America’s seniors as you consider funding legislation during the remaining days of the 116th Congress.
Seniors are the hardest hit by the coronavirus pandemic. Eight out of 10 deaths from COVID in the U.S. have been in adults 65 years old and older. Whether as part of an omnibus funding bill, continuing resolution or COVID relief package, we urge you to include the following urgently needed relief for seniors:
Fix the “notch” in Social Security, averting dramatic cuts in future benefits
As a result of the devastating impact COVID-19 has inflicted on the nation’s economy, aggregate wages are expected to be substantially lower in 2020 than they were in 2019. According to the Chief Actuary of Social Security, this will result in a sharp reduction in benefits for everyone born in 1960 compared to the benefits received by people born just one year earlier, creating an effect known as a “notch”. The benefit cut to these workers is through no fault of their own, is completely unrelated to the benefits they earned through their working years and will result in significantly lower benefits for the rest of their lives.
Congress must correct this problem by including a bill introduced by Representative John Larson, H.R. 7499, the “Social Security COVID Correction and Equity Act” in any end of session legislative package. The bill fixes the notch for individuals born in 1960 and 1961 without cutting benefits for any other beneficiaries. In addition, the temporary benefit improvements in H.R. 7499 would greatly enhance income security for older adults when they need it the most during the current pandemic.
Provide a “bump” in Social Security benefits to help seniors stay safe during the pandemic
The COVID-19 pandemic has been devastating to older Americans who are especially vulnerable to the disease. Even before the pandemic, many seniors struggled to keep up with ever-rising health care and prescription drug costs, as they are the most significant expense most seniors face. During this pandemic, they have also confronted increased costs for the personal protective equipment and cleaning supplies essential to help keep them safe, as well as increased costs for food deliveries and out-of-pocket costs for COVID-19 treatments if they do become infected. More than half of seniors receive over one-half of their income from Social Security, and it provides at least 90 percent of income for more than one-in-five seniors. These seniors are dependent on a reasonable Cost of Living Adjustment (COLA) to maintain even a modest standard of living in retirement.
On October 13, 2020, the Social Security Administration announced that the COLA for Social Security beneficiaries in 2021 would only be 1.3 percent, one of the lowest inflation increases in the programs’ history. This will amount to an increase of only about $20 per month for the typical beneficiary, 20 percent of which will be erased by increasing premiums for Medicare. As you consider the need to provide expanded unemployment benefits and stimulus checks to workers, we urge you not to forget the needs of America’s seniors. Including a benefit increase of 3 percent monthly or a flat $250 increase monthly, as proposed by Representative Peter DeFazio in H.R. 8598, will help millions of seniors survive this deadly time while providing an invaluable boost to the nation’s economy.
Forgive payroll tax deferrals
Fallout from the President’s executive order to defer payment of payroll taxes should be mitigated in COVID relief or appropriations legislation. Federal civilian employees and military personnel were required by the Trump Administration to defer having their FICA taxes withheld from their paychecks from September 1, 2020 to December 31, 2020. A relatively small number of private sector employers and employees may also have participated. Between January 1, 2021 and April 30, 2021, these employees will be required to payback their deferred payroll taxes. As a result, the amount of their FICA taxes will double for the first four months of 2021. The National Committee supports easing the burden of workers affected by this hardship.
Extend expiring health care programs and provisions that need funding or authorization to continue
The Money Follows the Person (MFP) program provides grant funding to states through the Medicaid program to facilitate transition from institutional programs to their communities. Since 2008 the program has helped more than 100,000 individuals move back to their communities. MFP has bipartisan support, saves money and helps seniors to live where they prefer. But states are beginning to discontinue the program because frequent short-term extensions of MFP have created uncertainty around funding. We urge Congress to provide a permanent, or at least longer-term, extension of this effective program. At a time when nursing homes have been so susceptible to COVID-19, it is especially important to facilitate transition of seniors back to the community.
Spousal impoverishment protections allow the spouses of individuals who receive Medicaid long term care to keep a limited amount of income and resources that do not count for purposes of determining Medicaid eligibility for the spouse receiving services. Initially this only applied to spouses receiving institutional care through Medicaid. A provision in the Affordable Care Act extended spousal impoverishment protections to spouses of individuals receiving Medicaid Home and Community Based Services (HCBS). Congress should permanently extend these protections for Medicaid HCBS services before the program expires on December 11, 2020.
Extend Funding for Medicare Low-Income and Enrollment Assistance, which provides money for State Health Insurance Assistance Programs and Area Agencies on Aging among other programs that help low income seniors access programs such as the Medicare Prescription Drug Program Part D Low-Income Subsidy.
Additional Priorities for Older Americans
We also urge you to include the priorities in the September 22, 2020 letter I sent to you in any end of session package
The coronavirus public health crisis is both a health and an economic threat to older Americans, people with disabilities and survivors. Millions of vulnerable Americans need a more targeted response to ensure their economic and health security. I urge you to include the National Committee’s priorities in a robust COVID relief or appropriations legislative package.
President and CEO