As conservatives and liberals argue how best to save the Medicare system from financial ruin, America’s wealthy are in the cross hairs. At issue is whether or not wealthy senior should pay more for their Medicare benefits? According to a report from the conservative Heritage Foundation, multimillionaire seniors receive too much in government subsidies for their Medicare coverage.
The Nation Journal reports:
J.D. Foster, a senior economics fellow at Heritage, says making wealthier seniors pay more in Medicare premiums is just the reform the program needs to get its fiscal house in order. Using the Medicare Trustee’s report, Foster calculated that taxpayers spend an extra $4,897 per Medicare beneficiary above what is collected in Medicare-specific taxes and premiums. Eliminating that subsidy, Foster says, “and Medicare’s shortfall disappears now and forever.”
Making wealthier seniors pay more for their Medicare is quietly becoming the most likely compromise between Democrats and Republicans in their ongoing battle over the mammoth federal health program. President Obama has repeatedly backed the idea of getting richer seniors to pay more for Medicare, most recently in his 2013 budget proposal.
Should wealthy beneficiaries pay more in premiums, or should be program be collecting more from the beginning? The Medicare tax rate is 1.45 percent for employees and employers (2.9% total). Why not increase the rate on individuals with a higher income (e.g., 3.5% on earnings of $110,000)?
Seniors already pay a $99.90 premium for doctors’ services under Medicare. That increases when married seniors have a combined income of $170,000, and maxes out at $319.70 per month for individual seniors making $428,000 or more. Foster says seniors making $170,000 per year are likely still working and have access to employer-sponsored insurance. Or if they are retired and earning that money off of a portfolio, their assets could worth more than $2.8 million.
“This means that multimillionaire retiree seniors still qualify for a Medicare subsidy. Something is seriously wrong with this picture,” Foster wrote.
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