A group of Democratic senators has introduced a new bill aimed at capping out-of-pocket expenses for traditional Medicare beneficiaries at $5,000. The Medicare Cost Cap Act was presented on Thursday by Senators Lisa Blunt Rochester (D-Delaware), Ron Wyden (D-Oregon), and Senate Majority Leader Chuck Schumer (D-New York).
The legislation seeks to “level the playing field” between traditional Medicare and Medicare Advantage, the latter of which imposes annual limits on out-of-pocket costs, similar to employer-sponsored insurance and marketplace coverage.
Currently, traditional Medicare has no such cap, and it is estimated that over the next decade, 52% of beneficiaries will exceed the proposed $5,000 limit at least once. According to the senators, the bill would benefit 3.2 million Medicare enrollees by 2028, allowing them to save an average of $1,024 annually.
In addition to establishing a spending cap, the bill aims to protect low-income seniors—who “almost solely” depend on Social Security benefits—from rising premiums and cost-sharing. The announcement highlights that Medicare Part B premiums surpassed $200 for the first time last year.
“Americans spend their entire working lives contributing to Medicare, yet those on traditional Medicare are the only group not shielded from financial ruin,” said Senator Blunt Rochester in a statement. “This legislation modernizes Medicare, reduces costs, and provides peace of mind to millions of seniors and individuals with disabilities who rely on this program. No one should face bankruptcy at the cusp of a health emergency, and establishing a cap on out-of-pocket costs within traditional Medicare offers greater financial protections to more seniors and individuals with disabilities than almost any other American.”
Other 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).
Several advocacy groups have endorsed the bill, including Families USA, the National Council on Aging, and the Center for Medicare Advocacy.
“This legislation would mark a significant first step in aligning traditional Medicare with other health insurance coverage by adding a cap on out-of-pocket costs and beginning to rebalance the traditional program with private Medicare Advantage,” said David Lipschutz, co-director of the Center for Medicare Advocacy, in a statement. “Additionally, easing eligibility for Medicare savings programs will make Medicare more affordable for a larger number of individuals.”
Photo: Vadzim Kushniarou, Getty Images
