Budget Deal Could Hike Medicare Premiums for Many

by Christopher Freeburn | December 20, 2012 9:48 am

WashingtonPromo Budget Deal Could Hike Medicare Premiums for Many[1]One likely outcome of any budget deal between President Barack Obama and congressional Republicans is raising fees on higher-income Medicare beneficiaries[2].

Both sides in the ongoing, if rocky, negotiations over tax hikes and budget cuts have signaled their support for letting Medicare premiums rise for senior citizens considered wealthy under government rules, the Associated Press notes.

Medicare premiums could rise by increasing monthly costs for prescription drug coverage and outpatient services on seniors with incomes over specified levels. Currently, individuals with annual incomes over $85,000 or couples with combined incomes over $170,000 are hit with surcharges.

Under a deal, the government could also simply stop adjusting the income levels for inflation, gradually increasing the number of people who would have to pay the higher charges.

Raising Medicare premiums on wealthy seniors would generate $20 billion over a decade. Already, 5% of Medicare recipients have been notified that their premiums will go up next year. If a budget deal is reached, that could jump as high as 25% of Medicare recipients.

Advocates of the plan argue that Medicare can no longer afford to extend benefits at a low cost to people who could afford to pay more, especially when the federal government is in financial distress. Organizations that represent seniors, however, contend that making higher-income recipients pay more for their Medicare coverage amounts to a tax.

The opinions contained in this column are solely those of the writer.

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Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/08/WashingtonPromo.jpg
  2. is raising fees on higher-income Medicare beneficiaries: http://bigstory.ap.org/article/medicare-premiums-could-rise-many-retirees

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