Congress will have a full agenda during the first year of the Biden presidency. Economic stimulus will be a priority, although the political parties have different ideas about the role government should play in reviving the economy during a pandemic.
Eleven million members of the workforce have reached the age of 65. Nearly three million of those work in industries that were hard hit by the pandemic, including retail, service, and travel. Older employees have lost their jobs at a higher rate than their younger peers.
Extended unemployment benefits may help older workers in some states. However, eligibility for extended state benefits or federal Pandemic Emergency Unemployment Compensation can be confusing. Even workers who qualify for benefits may experience a coverage gap as they wait for new benefits to take effect.
President-elect Biden promised that help for older Americans would be central to his presidency. Seniors are paying close attention to proposals that would provide them with additional assistance through Social Security and Medicare.
While Social Security provides a safety net for seniors, the benefits are far from generous. President-elect Biden has proposed a benefit increase for:
- Recipients who earned low lifetime wages and worked at least 30 years prior to retirement.
- Recipients who have received Social Security benefits for at least 16 years.
- Surviving spouses.
A cost-of-living adjustment will increase Social Security benefits by a modest 1.3% in 2021. Another Biden proposal would base the cost-of-living adjustment on a consumer price index that gives more weight to the most significant expenses that seniors encounter, including healthcare. That proposal would have increased the annual adjustment to 1.5% in 2021. Over time, however, the compounded increases would add up to a significant boost in benefits.
There may be broad political support for Biden’s plan to change the cost-of-living calculation. How Congress will view Biden’s other proposals is uncertain. Biden’s proposals are tied to a plan that would impose payroll taxes on individuals who earn more than $400,000 a year.
While it may seem fair that high-income earners should pay the same payroll tax that low-income earners pay, many members of Congress respond with reflexive resistance to proposed tax increases. The growing number of older Americans and the political power they wield may nevertheless give Biden some leverage as he seeks to negotiate changes that will benefit Social Security recipients.
Seniors can try to manage their healthcare costs by relying on Medicare, but limitations in Medicare benefits often force seniors to rely on savings to meet their full needs. Seniors who have no other resources may go without uncovered healthcare that they can’t afford.
Medicare Part D offers various plans that cover some or all of the cost of prescription drugs. Drug coverage is also available through some Medicare Advantage plans.
Medicare Part D has been criticized for its coverage gap. Beneficiaries pay 25% of drug costs until they reach a threshold spending limit. A “donut hole” built into coverage requires most Part D beneficiaries to share the cost of prescription drugs with drug manufacturers until they reach a “catastrophic spending threshold.” Part D has also been criticized for doing too little to manage the high cost of prescription drugs or to reduce the tendency to prescribe expensive drugs that have questionable value relative to their cost.
The Prescription Drug Pricing Reduction Act of 2019 was introduced in the Senate Finance Committee in 2019. The bill would have implemented several strategies to reduce drug prices. It would also have established a cap on the amount of out-of-pocket costs that Part D beneficiaries would be required to incur. While the bill had bipartisan committee support, it met the fate of most Senate legislation when it failed to advance after being reported to the full Senate.
President-Elect Biden has proposed a similar plan, although Biden’s proposal would allow the government to negotiate prices with pharmaceutical companies. Since Medicare offers a large market for drug companies, many consumers believe it is reasonable to give the government the same opportunity to negotiate drug prices that private insurance companies enjoy. Pharmaceutical companies and their lobbyists disagree. Whether the interests of consumers or pharmaceutical industry lobbyists will prevail remains to be seen.
Medicare Dental and Vision Benefits
Dental care is an important component of senior health. Tooth loss and gum disease can lead to malnutrition and serious health conditions.
Medicare does not cover routine visits to the dentist. Nor does it cover fillings, extractions, dentures, or most other dental procedures. Some, but not all, optional Medicare Advantage plans offer dental coverage, although the scope of that coverage depends on the plan.
The Medicare Dental Benefit Act of 2019 would have expanded Medicare coverage to include both routine and major dental services, emergency dental care, and dental prosthetics. The bill was introduced in the Senate and referred to the Finance Committee, where it languished. It died at the end of the last session of Congress.
Medicare also does not cover eye exams or the cost of eyeglasses. Medicare Part B might cover the cost of treating age-related macular degeneration. It also covers glaucoma tests for individuals who are classified as high risk. Medicare Part B is subject to a deductible that requires recipients to pay 20% of the cost.
The Democratic platform expressed support for “finding financially sustainable policies to expand Medicare to cover dental, vision, and hearing.” Platforms often express policy goals that are unattainable when the prevailing party does not enjoy a significant majority in both branches of Congress. Whether legislation to expand Medicare coverage for dental and vision care will be enacted in the next congressional term may depend on whether seniors make their voices heard.