On March 27, President Trump signed into law bipartisan Coronavirus relief legislation that will provide Older Americans and people with disabilities with urgently needed financial and medical assistance that with help them survive the COVID-19 pandemic. While the National Committee supported provisions in the bill to offer cash stimulus payments to seniors and make health care benefits more accessible during the crisis, we opposed the bill’s employer payroll tax rebates and deferrals because they undermine the earned right benefit nature of the program, opening the door for privatization or future benefit cuts that will hurt seniors and people with disabilities. To follow is a summary of key provisions in the new law:
Provisions Supported by the National Committee:
- Recovery rebates for individuals: All U.S. residents with adjusted gross income (AGI) up to $75,000 ($150,000 married), who are not a dependent of another taxpayer and have a work eligible social security number, are eligible for the full $1,200 ($2,400 married) rebate. In addition, they are eligible for an additional $500 per child.
The income thresholds would be based on 2018 tax returns and would phase out at a rate of $5 for each $100 above the line. That means a single filer with AGI above $99,000 will not get a check, while that cutoff is $198,000 for married couples.
For the purpose of receiving the rebates, either filing 2018 or 2019 tax returns are acceptable. If no return is filed, the Treasury Department is instructed to look at the Social Security Administration’s (SSA) 1099s (e.g. Social Security beneficiaries would qualify even if they do not file income taxes).
Supplemental Security Income (SSI) recipients filing a zero-liability tax return should receive the rebate. The SSI program provides vital and much needed economic security for 8.2 million low-income seniors and people with disabilities, including children with marked and severe functional limitations.
The SSA operating budget would be increased by $38 million to help the agency administer the rebate program.
- Social Security Administration: The bill includes $300 million to support essential telework, communication needs, and salaries and benefits of Federal SSA employees impacted by office closures. This funding also provides the resources necessary for processing disability and retirement workloads and backlogs when SSA offices reopen to the public.
- Centers for Medicare & Medicaid Services (CMS): The bill includes $200 million for CMS to assist nursing homes with infection control and support states’ efforts to prevent the spread of coronavirus in nursing homes.
- Medicare telehealth flexibility: The bill makes telehealth appointments more accessible to Medicare beneficiaries. This will allow seniors — who are particularly vulnerable to the coronavirus — to avoid going to hospitals or doctors’ offices for routine care that can be provided virtually. The telehealth option will not replace in-person health care when more extensive work ups are needed for diagnosis, or for monitoring conditions, or when patients need in-office procedures, or surgery.
- No Medicare beneficiary cost sharing for COVID-19 vaccine: When a coronavirus vaccine is available, Medicare beneficiaries would pay nothing out of pocket for the injection under Medicare Part B.
- Medicaid home and community-based care: Extends Medicaid home and community-based long-term care spousal impoverishment protections and the Medicaid “Money Follows the Person” Program (a demonstration that helps patients transition from institutional care to home and community-based care) until November 30, 2020.
- Three-month prescription drug supply: Enables the Medicare Part D prescription drug program to provide Medicare beneficiaries with a three-month supply of their medications.
- Providing home and community-based support services during hospital stays:
The bill would allow state Medicaid programs to pay for direct support professionals, caregivers trained to help with activities of daily living, to assist disabled individuals in the hospital to reduce length of stay and free up beds.
- Clarification regarding coverage of tests: The bill clarifies that Medicare and Medicaid beneficiaries can receive all tests for COVID-19 with no cost-sharing.
- Providing state access to enhanced federal Medicaid payment: The bill would ensure that state Medicaid programs are able to receive the 6.2 percent increased Federal Medical Assistance Percentages payment. Medicaid is the main source of coverage of long-term services and support, and many older adults and people with disabilities depend on the program for their health care needs.
- Coronavirus prevention, preparedness and response: $4.3 billion to support federal, state, and local public health agencies to prevent, prepare for, and respond to the coronavirus, including for the purchase of personal protective equipment; laboratory testing to detect positive cases; infection control and mitigation at the local level to prevent the spread of the virus; and other public health preparedness and response activities.
- Administration for Community Living: $955 million for Older Americans Act and disability services programs, including senior nutrition; home and community-based supportive services; family caregivers; elder justice; and independent living.
- Housing for the Elderly: $50 million to maintain housing stability and services for low-income seniors.
- Low Income Home Energy Assistance Program: $900 million in grants to states to support immediate home energy assistance for low-income households affected by the coronavirus.
Provisions Opposed by the National Committee:
We opposed these provisions and any other alterations to the payroll tax that reduces revenue flowing into the Social Security trust fund or undermines the “earned right” nature of the benefit.
- Employee retention payroll tax credit: In order to incentivize employers to keep their employees on payroll rather than laying off those employees, this provision would offer a fully refundable tax credit, tied to the payment of employee wages, against the employer’s share of Social Security payroll taxes. Payroll tax revenue forgone by this proposal would be replaced by general revenue and transferred to the trust fund.
- Payroll tax deferral: Employers allowed to defer payment of their share of Social Security payroll tax – half until next year and the other half until 2022. Payment of payroll tax revenue deferred by this proposal would be replaced by general revenue and transferred to the trust fund.
- Suspension of Medicare sequester: The bill would temporarily lift the Medicare sequester, which reduces payments to providers by 2 percent, from May 1 through December 31, 2020, boosting payments for hospital, physician, nursing home, home health, and other care. The Medicare sequester would be extended by one-year beyond current law to provide immediate relief without worsening Medicare’s long-term financial outlook.
While the National Committee supported suspending the Medicare sequester this year, we oppose the extension of the sequester for an additional year to pay for the temporary suspension. Instead, general revenue – used to pay for a significant part of the provisions in the bill – should have been used to offset the one-year Medicare sequester suspension. The Medicare sequester could affect beneficiary access to health care providers.