Medicare Trick or Treat?
Why Make 654,000 Seniors Pay More for the Same Medicare Benefits?
October 29, 2003
Imagine this: You've worked very hard to increase your income and assets over your working life. You've been responsible, invested intelligently, and planned ahead for your retirement. You contributed 2.9 percent in payroll taxes on your high income to support Medicare Part A (the hospital program). Plus you paid thousands of dollars in general federal taxes to fund Medicare Part B (outpatient doctor visits). Now you retire and begin to collect the promised benefits, including the Medicare benefits you thought were going to be there for you. But surprise! You and some other seniors could have to pay three times in premiums what most seniors pay for the same Medicare benefits.
Does this seem fair to those who have already paid higher Medicare taxes all their working lives? (There is no income cap on the current 2.9 percent Medicare Part A payroll tax; both workers and employers each contribute 1.45 percent of workers' income.) Why should they have to pay more than othersfor the same benefitswhen they retire?
The October 5 New York Times reported that Congress is considering raising premiums for higher-income seniors. Rep. Nancy Johnson (R-Conn.), chairwoman of the House Ways and Means Committee's Subcommittee on Health, told the Times, "I do not believe that someone with a $200,000 income living in a gated community should have exactly the same subsidy as someone struggling along on $25,000 or $30,000 of income." Why not? They paid more to support Medicare. That's like saying that someone who lives in a gated community who paid Social Security taxes on a $200,000 income should not collect a proportionate amount (subsidy) of cash benefits based on their contributions.
Currently, there are seniors who would like to collect their Social Security benefits, but due to federal policies are being denied their cash benefits because they refuse to join Medicare Part A (the hospital portion of Medicare). Some have wondered why the government prevents higher-income seniors from rejecting enrollment in Medicare Part A, and instead buy their own catastrophic health insurance or pay cash for medical services. Perhaps we have the answer: Higher-income seniors are going to have to carry the burden of an ever-increasing number of Baby Boomers getting ready to enter Medicare.
Rather than implement policies that encourage all consumers to become cost-conscious regarding health care, the Medicare reformers want to add a new prescription drug benefit that will increase the overall costs of an already soon-to-be-bankrupt program. For many seniors, they will end up paying more for the same or less coveragereceiving a trick rather than a treat.
By Sue A. Blevins, president of the Institute for Health Freedom and author of Medicare's Midlife Crisis.