28 Jan AARP Legislative Counsel Talks Congressional Progress for Seniors

Marva Reed during a 2021 The CC Pulse community conversation. (Screenshot captured by Danielle Parenteau-Decker / The CC Pulse file)

By Tony Hicks
Bay City News Foundation

No matter which side of the aisle a senior is on, there’s a good chance they’ll benefit from legislation Congress passed in 2022 that went into effect this month.

David Certner, the legislative counsel and legal policy director for the American Association for Retired People, said it was a good year for seniors. He cited legislation like the Inflation Reduction Act, which included capped out-of-pocket spending on prescription drugs and reductions in health insurance premiums.

Even though much of the process wasn’t politically bipartisan, Certner said opinion polls show consistent, cross-party support for issues like cheaper prescription drugs and more pension flexibility.

“I would also say that these are all provisions that have overwhelming support among voters, whether you’re Democrat, Republican or an independent right now,” Certner said.

Certner went through some of the major changes going into effect this month or within the next few years that benefit seniors, including:

Social Security: “As you know, there was 8.7% COLA (cost of living adjustment) this year; that was the biggest COLA in over 40 years,” Certner said. “That was a pretty big deal for seniors.”

Certner said “part of the good news about that” was Social Security payments went up in a year that Medicare premiums went down $5, which doesn’t happen at the same time very often.

The average monthly Social Security benefit went up $146, from $1,681 to $1,827.

“I just think it’s notable,” Certner said. “The (COLA) increase is already built into the law. If you’re talking about what’s new in town, that’s obviously a pretty big and new thing in terms of what came out of (President Biden’s) Build Back Better (plan).”

The government added funding to the operation of the Social Security Administration, which also administers disability payments.

“It’s been underfunded, particularly the last decade, and so SSA hasn’t been able to serve people who already earn their Social Security benefits, as well as disability,” Certner said. “For example, the average time just to process a disability claim had grown to over 200 days and the average wait time just for a hearing on the disability claim was over a year.”

He said wait time of more than 30 minutes discouraged people from calling to get help. Giving SSA another $800 million to help them serve the public will help.

“The customer service has just been deteriorating over the last decade because we’ve seen the population (grow), and what Social Security is covering is growing, yet the amount of funding has been falling short year after year,” Certner said.

Medicare/Prescription drugs: Standard Medicare Part B premiums will come down a bit, from $170.10 to $164.90 per month, after a big jump the previous year. More than 13 million Americans covered under the Affordable Care Act will see their premiums go down $800 annually.

But the 2022 legislation also caps seniors’ out-of-pocket spending for prescription drugs at $2,000 per year (starting in 2025). And no one on Medicare will pay more than $35 per month for insulin.

“That’s a pretty big deal for people who didn’t have coverage otherwise,” Certner said. “You know you could easily be paying 100 or 200 dollars a month or more, so this is advantageous for seniors.”

Medicare will now cover telehealth appointments for two more years, expand mental health coverage, and will now cover all recommended vaccines for free.

“One good example of that is the shingles vaccine which, again — if you don’t necessarily have coverage otherwise — (insurance) sometimes may cover it, but that single vaccine could easily be $250, so that’s a nice benefit for those who you need that vaccine — or others, for that matter.”

Drug companies will now also have to pay penalties for raising their prices faster than the rate of inflation; every percentage point over inflation goes back to the government.

“Historically, we’ve seen drug companies raise their prices like two or three times what the inflation rate was each year,” Certner said. “So that will help hold down the price increases for drugs that are already on the market. This was really a big victory to get this done.”

>>>Read: Corporations Are Using Inflation to Pad Profits, Economist Says

Another victory was starting the process of allowing Medicare to negotiate drug prices for the first time, which Certner called “the biggest and most contentious piece” of new legislation on which AARP worked.

“That was maybe the one that the drug companies fought the hardest,” Certner said.

The Department of Health and Human Services will identify the 100 drugs on which Medicare spends the most. Negotiating can start in 2023, but consumers won’t feel the relief until 2026. And only 10 drugs per year can be negotiated the first year, with the number rising to 15 in 2027-28 and no more than 20 in 2019 and beyond.

“That would only apply to drugs that have more than one manufacturer,” Certner said. “We are starting with the new drug that Medicare has spent the most on so that that’s good because it’ll be at least one that has the biggest impact on people.”

According to AARP, in 2020 that drug was Eliquis ($9.9 billion from Medicare), which is for atrial fibrillation, followed by Januvia ($3.9 billion) for diabetes, then Xtandi ($2 billion) for cancer.

Certner said negotiated prices would help keep Medicare solvent moving forward.

“The U.S. pays the highest drug prices in the world — sometimes two to three times as much as drugs in other countries,” Certner said. “That could be pretty significant savings, which is good both for individuals who have to purchase these drugs, but it’s also great for the Medicare program.

Pensions: For people 50 and older, annual contribution limits on IRAs and 401(k)s go up $500 to $7,500. Workplace retirement contributions for people 50 and over go up to $30,000

Part-time employees can work somewhere for two years before enrolling in a company plan, down from three years.
Certner said companies offering pension or 401(k) plans will have to automatically enroll employees, who can then opt out, instead of the other way around.

There’s also been a bump in the savers tax credit, which goes to lower-to-moderate wage workers putting money away. Certner said the credit is essentially a government match of contributions as a tax credits and will help seniors.

“We think this is a pretty big deal to help more lower to moderate wage workers build up their retirement savings”

The required age to start taking money for retirement accounts has also increased, from 72 to 73, as well as a few other tweaks benefiting seniors.

“There’s a lot of great things coming,” Certner said.

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