Multimillionaire seniors are getting too much in government subsidies for their Medicare coverage, according to a report from the conservative Heritage Foundation.
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.
It’s a centrist position that some of his more liberal colleagues dislike. They argue that it will ultimately force wealthier seniors into buying their own private insurance and make Medicare a program for the poor.
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.
While Democrats have agreed to increasing Medicare premiums in the past, none of the proposals comes close to closing the $4,897 gap, Foster said in an interview. But he is still hopeful about the prospects.
“This is something that, for all of the screaming that goes on over Medicare, has bipartisan support,” Foster said.