Raise Medicare Premiums???

Most Medicare beneficiaries pay a monthly premium for doctor visits (Part B) and prescription drug coverage (Part D).  The premiums people pay for parts B and D covers about 25% of what Medicare spends on these services.  Individuals with annual incomes of more than $85,000 and couples with annual income above $170,000 pay higher premiums, which cover more than 25% of Medicare spending.  Some proposals would increase premiums for everyone in Medicare to cover a larger portion of the program’s costs.  Under one proposal, the standard Medicare premiums would go up from 25 to 35% of program costs.  If that proposal were to go into effect this year, the current $99.90 monthly premium for Medicare Part B paid by a typical beneficiary would cost 40% more, or an additional $40 per month.  Part D premiums, which vary widely by plan and region, would increase similarly.

Pro:  Increasing the basic premiums for Medicare Part B and D makes sense.  It would help Medicare’s finances and can be done while protecting lower-income seniors.  Parts B and D are voluntary “add-ons” to the Medicare coverage seniors receive for hospital services (also known as Part A), which Americans pay for through the payroll tax.  A retired couple with, say, $120,000 of annual income from investments is certainly better able to pay a higher proportion of B and D costs than their $50,000-a-year working-age neighbor can pay in taxes, so it would make sense to raise premiums for many older people with incomes below the level where Medicare currently charges higher premiums.  (Stuart Butler, Heritage Foundation)

Con:  Some upper income Medicare beneficiaries can afford — and already pay — more than the normal premium.  But for too many seniors, even current premiums are burdensome.  Across-the-board premium increases would hit elderly and disabled single persons with incomes barely above $15,000 and couples with incomes above $23,000 who can ill afford higher charges.  Raising premiums across-the-board is a terrible idea.  (Henry J. Aaron, Brookings Institution)

Join the conversation about the future of Medicare at www.earnedasay.org

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About alonegwen

Retired educator interested in living life fully. Will write about aging wisely, good reads, food, travel, dance reviews, and other items as they interest me.
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2 Responses to Raise Medicare Premiums???

  1. Blonduxo says:

    Not directly related to the issue of raising medicare premiums but some interesting news about Medicare:
    Government to reduce Medicare funding for hospitals with high readmittance rates
    More than 2,000 hospitals, including some nationally recognized ones, will be penalized by the government starting in October because many of their patients are readmitted soon after discharge, new records show. Together, these hospitals will forfeit about $280 million in Medicare funds over the next year as the government begins a wide-ranging push to start paying health care providers based on the quality of care they provide.
    Chicago Tribune, September 13, 2012 http://articles.chicagotribune.com/2012-09-13/business/ct-biz-0913-bf-medicare-penalties-20120913_1_high-readmission-readmission-rates-million-in-medicare-funds
    Where I work at Group Health in Seattle, we have had a program in place for over a year to reduce re-admission rates. I am directly involved in it and we have reduced out re-admission rate from about 18% which is the national average to about 13% with this program of which I am proud to be a part.
    and:
    EMPLOYER / EMPLOYEE ISSUES
    Medicare Spending Cuts To Lead to Loss of 766K Health Jobs, Report Says
    A coalition of three major medical groups estimates that up to 766,000 health care jobs will be lost by 2021 if Congress fails to avert a 2% cut in Medicare spending included in the 2011 debt reduction agreement. The coalition urged lawmakers to take action to prevent the cuts.
    California Healthline, September 14, 2012 http://www.californiahealthline.org/articles/2012/9/14/medicare-spending-cuts-to-lead-to-loss-of-766k-health-jobs-report-says.aspx

    • alonegwen says:

      Excellent information. So glad that Group Health is working on their readmission rates. This is a big problem across the country. And the “fixes” for Medicare lead into very complicated multilayerd issues. Thanks for reading and thank you for your comments.

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