maximum Federal payment level under SSI is estimated to reach $258.60 per month for eligible individuals and $387.90 per month for eligible couples. Federal benefit payments for SSI during fiscal year 1981 are expected to reach $6.085 billion, an increase of $495 million from fiscal year 1980. SIX PERCENT MARCH ANNUITY INCREASE FORECAST FOR FEDERAL RETIREES The administration announced a 6 percent cost-of-living increase for Federal civil service annuitants in March 1980, followed by an estimated adjustment of 5.8 percent in September 1980. Cash outlays from the civil service retirement and disability fund are projected to increase from $14.556 billion in 1980 to $17.089 billion in 1981. The number of annuitants is expected to rise to a level of 1.8 million. RAILROAD RETIREMENT FUNDS The Railroad Retirement Board, a Federal agency, administers benefits equivalent to social security as well as industry pensions for retired and disabled railroad employees, their dependents, and survivors. Benefit outlays are expected to increase from $4.748 billion in fiscal year 1980 to $5.227 billion in fiscal year 1981. This increase in benefits will occur despite an expected drop in beneficiaries of 21,000 from an estimated 1,006,000 at the end of 1980 to an estimated 985,000 in 1981. The administration's budget sees sound financing as a "major concern" for the railroad retirement system. The Board's most recent projections suggest that the industry pension fund is underfunded and will be exhausted by 1984. Therefore, the budget reflects proposed legislation to restore the railroad industry pension fund to solvency. Financial soundness would be achieved by a 2-percent increase in revenues from the railroad industry payroll by removing the ceiling on earnings subject to railroad retirement taxes. The proposal would also restrain future growth in benefits. VETERAN'S BENEFITS: NEW COST-OF-LIVING INCREASE INSURES GROWTH IN PAYMENTS The Veterans' and Survivors' Pension Improvement Act of 1978 (effective January 1, 1979) provided for automatic annual cost-ofliving increases comparable to social security increases for pensioners in the improved program. Combined pension outlay requirements for fiscal year 1981 are estimated at $4.032 billion, an increase of $320 million over fiscal year 1980. These costs will increase despite a slight projected drop in the number of recipients: Veterans' cases will drop from 984,000 to 980,000 and survivor cases will drop from 1,183,000 Burial benefits are expected to increase from $185 to $190 million in fiscal year 1981; in addition, hospital and medical care service outlays for veterans are expected to rise from $5.926 billion to $6.101 billion in 1981. The number of veterans over age 65 is expected to increase by 127 percent during the 1980's as virtually all of the 27 million veterans of World War II reach this age. As a result, the Veterans Administration's medical care and research activities will devote increasing attention to the problems of aging veterans. MILITARY RETIREMENT PAY EXPECTED TO REACH $13.7 BILLION The administration's budget estimates an increase in military retirement pay from $11.5 billion to $13.7 billion in fiscal 1981. The average number of persons on the military retired rolls is expected to rise by about 41,000; from 1.31 million in fiscal year 1980 to 1.35 million in fiscal year 1981. PRESIDENT'S COMMISSION ON PENSION POLICY The President's Commission on Pension Policy was established to develop recommendations to the President for more efficient and more equitable retirement systems for older American workers. Among other issues, the Commission is examining what constitutes an adequate standard of living upon retirement and the ability of various retirement systems to meet the needs of the retired population. In fiscal year 1980, $2 million in budget authority was made available to support the work of the Commission. This amount will carry over into fiscal year 1981 to pay salaries and costs until the Commission PENSION BENEFIT GUARANTY CORPORATION: RECEIPTS TO EXCEED EXPENDITURES IN 1981 The Pension Benefit Guaranty Corporation (PBGC) was established by the Employee Retirement Income Security Act of 1974 (ERISA) to protect the vested annuities of workers in covered pension plans that terminate resulting in the loss of benefits. Employers with covered plans pay an annual premium of $2.60 per participant to cover the PBGC's costs of taking over terminated pension plans. The Corporation's receipts are expected to exceed expenditures in 1980 by $37 million and by $46 million in 1981. These budget estimates take into account legislation introduced in 1979 that would substitute a comprehensive program designed to prevent the termination of multiemployer pension plans. Multiemployer plans are not presently covered by the PBGC, but are scheduled to be covered by May 1, 1980, the effective date of the proposed legislation. III. HEALTH MEDICARE BUDGET-CURRENT SERVICES Total outlays for medicare hospital insurance (part A) are expected to increase by about $3 billion from fiscal year 1980 to fiscal year 1981. Estimated total payments for fiscal year 1981 are $25.8 billion, compared to $22.8 billion during fiscal year 1980. Approximately 600,000 additional elderly and disabled medicare beneficiaries are expected to become eligible for hospital insurance protection during 1981. About 200,000 additional beneficiaries will receive reimbursed hospital services during the year. Payments for skilled nursing services are expected to increase by about $14 million from fiscal year 1980 to fiscal year 1981, and payments for home health services are expected to increase by about $104 million. Total outlays for medicare supplementary medical insurance (part B) are expected to increase by about $1.7 billion from fiscal year 1980 to fiscal year 1981. Estimated total payments for fiscal year 1981 are expected to be $11.4 billion, compared to $9.7 billion during 1980. About 600,000 additional elderly and disabled beneficiaries are expected to be enrolled in the part B program, and about 880,000 additional beneficiaries are expected to receive part B services. Payments for physician services are projected to increase by about $1.2 billion; payments for home health services by about $38 million; and payments for outpatient services by about $363 million. The administration's proposed medicare budget for fiscal year 1981 included a proposal for new legislation to remove the 3-day prior hospitalization requirement for determining eligibility for home health services under part A (hospitalization insurance). The budget also proposed a medicare demonstration project to evaluate the benefit of allowing home health aides to provide homemaker services. The estimated cost in fiscal year 1981 is $7.7 million. Legislation was also proposed, for the second year in a row, to expand medicare part В supplementary medical insurance benefits for outpatient mental health services of psychiatrists by increasing the reimbursement rate from 50 percent to 80 percent of reasonable charges and increasing the reimbursement ceiling from $250 to $750 annually. The estimated cost in fiscal year 1981 is $18 million. Proposals for hospital cost containment, common audit between medicare and medicaid, and authority for the Secretary of Health and Human Services to assess civil penalties for fraudulent part B claims are projected, if enacted, to save $693 million in fiscal year 1981. The budget also repeats the fiscal year 1980 proposals for: (1) Extending medicare coverage for disabled workers who return to work but are not medically covered (at an estimated total cost in fiscal year 1981 of $8 million); (2) eliminating or shortening the 24-month waiting period for medicare coverage for reentitled disabled individuals (estimated total cost of $35 million); and (3) restructuring medicare part A coverage for the working elderly (estimated total savings of $170 million in fiscal year 1981). Proposed legislation to restructure medicare payments for health maintenance organizations is estimated to cost $5 million in fiscal year 1981. Legislation proposed to eliminate the routine nursing salary cost differential in hospitals serving medicare payments is estimated to produce a savings to the part A trust fund of $191 million in 1981. New legislation is proposed under medicare part A to reimburse hospitals for patients receiving long-term care services, rather than acute-care services, at "reasonable" long-term care rates, rather than the hospital's normal acute-care rates. The budget estimates that this proposal would save $20 million in fiscal year 1981. Other legislative proposals under medicare part B would: (1) Allow reimbursement to ambulatory surgical centers for certain surgical procedures specified by the Secretary (savings of $3 million in fiscal year 1981); (2) change reimbursements for hospital-based radiologists, anesthesiologists, and pathologists (savings of $12 million in fiscal year 1981); (3) provide authority for competitive bidding procurement procedures for laboratory services, durable medical equipment, and other medical services and supplies (savings of $9 million in fiscal year 1981); and (4) provide for reimbursement on the basis of reasonable costs for some providers who have been reimbursed on the basis of charges (savings of $6 million in fiscal year 1981). Additional legislation is proposed to expand medicare part B benefits by providing coverage for removal of plantar warts (cost of $2 million in fiscal year 1981). Medicare Supplementary Medical Insurance: Proposed Legislation Ambulatory surgery center reimbursement (savings). Hospital-based physicians (savings). Competitive bidding (savings) _ _ Reasonable cost reimbursement (savings). In millions $10. 0 2.0 2.0 - 3. 0 12. 0 -9. 0 -6. 0 18. 0 -9. 3 2.0 Medicare Hospital Insurance: Proposed Legislation 1981 projected savings or additional cost: In millions -$680. 0 25. 0 - 170. 0 6. 0 3. 0 Eliminate nursing differential (savings). Home health expansion (cost).. Hospital long-term care payments (savings). Medicare/medicaid common audit (savings)_. *Additional $700,000 budgeted for demonstration program on - 191. 0 *.7 - 20. 0 - 4. 0 home health aide/ |