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We Think: A Means Test for Medicare Drugs Makes Sense to Raise Money for Health Reform
Orlando Sentinel
March 16, 2009
President Barack Obama has said he'll consider any good ideas, whether from Democrats or Republicans, to solve the nation's problems. He has put that promise into practice with an idea to help pay for expanded health-care coverage.
In his first budget plan, Mr. Obama has proposed charging higher-income seniors more for prescription-drug coverage under Medicare Part D. This good idea was championed in last year's presidential campaign by his Republican opponent, Arizona Sen. John McCain.
Higher-income seniors already pay more in premiums under Medicare Part B, which covers physician costs. This year, individual seniors who reported making between $85,000 and $107,000 on their last tax returns, or couples who reported making $170,000 to $214,000, are charged $38.50 on top of their $96.40 monthly Part B premium. The additional monthly cost for wealthier seniors gradually ratchets up, peaking at $211.90 extra for individuals making more than $213,000 and couples making more than $426,000.
Mr. Obama's proposed premium hikes for Part D would apply at the same income levels, according to his budget office. They would raise an additional $8.1 billion over the next decade to be dedicated to a fund to help bankroll a universal health-care plan.
Under current law, all but the lowest-income seniors are charged equally for the same taxpayer-subsidized prescription drug coverage under Medicare Part D — about 25 percent of the cost. Millionaires pay no more than the middle class. With the federal government running record deficits, this is nuts.
Critics of means testing premiums have argued that charging more to some seniors might lead them to drop their coverage. But even at the higher premiums Mr. Obama has proposed, prescription-drug coverage under Medicare would still be a good deal.
Democrats in Congress rejected a proposal from former President George W. Bush to means test Part D premiums. With Mr. Obama planning to use the proceeds from his version of that proposal to advance universal health care, long one of the Democrats' highest priorities, they would be wise to follow the president and embrace this good idea.
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