Press Releases: 2012

NEWS: Stark Introduces “The Medicare Secondary Payer and Late Enrollment Penalty Family Fairness Act”

Wednesday, 19 September 2012 10:38

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NEWS - CONGRESSMAN PETE STARK
239 Cannon House Office Building
Washington, DC 20515
(202) 225.5065
www.stark.house.gov

FOR IMMEDIATE RELEASE

September 19, 2012

Debbie Curtis, (202) 225-5065

Stark Introduces “The Medicare Secondary Payer and Late Enrollment Penalty Family Fairness Act”
Legislation Inspired by work on behalf of a Constituent

WASHINGTON -- Today, Rep. Pete Stark (D-CA), Ranking Democrat on the Ways and Means Health Subcommittee, introduced the Medicare Secondary Payer and Late Enrollment Penalty Family Fairness Act.  This bill corrects an anomaly in current law that subjects Medicare beneficiaries over age 65 to a more restrictive familial relationship test for purposes of Medicare secondary payer rules and protections from late enrollment penalties than younger beneficiaries who become eligible for Medicare due to disability.  Beneficiaries in same sex marriages are the most likely population to be hurt by current law.

Rep. Stark became aware of this problem through constituent casework.  After getting the constituent the benefits he was initially wrongly denied, Stark is following through to correct the underlying problem in the law that results in unfair treatment.

“I am proud to introduce this legislation today on behalf of my constituent, Joseph Goleman, who was initially improperly denied the protection from a Medicare late enrollment penalty because of his disclosure that he was in a same-sex marriage.  Joseph knew what happened to him when he visited the local Social Security office didn’t feel right. Thankfully, he immediately reached out to my office and we were able get him the benefits he was due,” said Rep. Stark.  

Rep. Stark continued, “My staff -- together with the Centers for Medicare and Medicaid Services Region 9 Field staff and Washington DC staff -- were able to ascertain that Mr. Goleman was in fact eligible for the benefits he was originally denied.  In the process, I learned that the law uses different definitions for family, depending upon how one becomes eligible for Medicare.  The Medicare Secondary Payer and Late Enrollment Penalty Fairness Act corrects that anomaly.  The confusion in current law is likely denying eligible beneficiaries the benefits they are due today -- as it would have Mr. Goleman if he’d not reached out to me.”

These different definitions of familial relationships mean that a person eligible for Medicare based on disability is protected from late enrollment penalties when covered by a same sex spouse on his or her employer plan.  However, a person eligible for Medicare because they’ve turned 65 is not.  That’s because the definition is “family member” for people with disabilities -- which includes legally-recognized same-sex marriages. For people who become eligible for Medicare when turning 65, the term is “spouse.” The Defense of Marriage Act prohibits that term from including state-recognized same-sex marriages.

“The practical effect of my legislation is to provide people over age 65 in same-sex marriages the choice to remain on their spouse’s employer health coverage as their primary insurance, without facing significant financial penalties from Medicare in the future.  Regardless of one’s position on same-sex marriage, this small change in law makes financial sense for Medicare and will ensure consistent treatment of people regardless of their age,” concluded Rep. Stark.

BACKGROUND ON MEDICARE SECONDARY PAYER RULES:

Medicare’s secondary payer rules generally allow an individual to maintain employer-sponsored coverage after they’ve obtained Medicare eligibility and forgo joining Medicare Part B (and therefore having to pay the Part B monthly premium) as long as they maintain such coverage.  In these instances, their employer-sponsored coverage remains their primary coverage, and Medicare Part A is their secondary coverage.  Very importantly, the law also protects people in this situation who later transition to Medicare Part B when they lose that employer-sponsored coverage.  Reflecting their continuous coverage, these individuals are not charged a late enrollment penalty.  The late enrollment penalty is designed to protect against adverse selection, where people wait to obtain Part B coverage until they get sick.  That is not the case with these beneficiaries. 

To read Rep. Stark’s introduction statement, please click here.

To read the bill text, please click here.