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Hit Rich For Medicare Fix?

Members of the House and Senate negotiating a law to add prescription drug benefits to Medicare are considering making wealthy senior citizens pay more for the program, a newspaper reports.

According to the New York Times, a House-Senate conference committee is considering raising the current premium — $58.70, or $704 a year — for seniors making more than a set level, like $75,000 or $100,000. Premiums would rise with income: a senior making more than $200,000 might pay as much as $2,100 a year.

Republicans have long advocated means-testing Medicare. Democrats have generally opposed it, fearing higher premiums would erode political support for the program among the affluent and even make some wealthy seniors drop out of Medicare.

But worries about the ballooning cost of the program are overcoming some of those objections, especially as the baby boom generation prepares to retire.

"High-income beneficiaries can afford to pay a larger share of Medicare's costs," said Sen. Dianne Feinstein, D-Calif. She said the plan would raise premiums for 2 percent of Medicare beneficiaries.

"I do not believe that someone with a $200,000 income living in a gated community should have exactly the same subsidy as someone struggling along on $25,000 or $30,000 of income," said Connecticut Republican Rep. Nancy Johnson.

The AARP, some unions and a few liberal Democrats still oppose means testing. But influential scholars and liberal think tanks are backing it.

"I don't see an objection to having an income-related premium," Robert Ball, a former Social Security Administration commissioner, told The Times. "I am opposed to varying Medicare benefits according to the income of the recipient, but I find it completely acceptable to have people with higher incomes pay more for those benefits."

"This is one of the most reasonable, most justifiable, least painful changes you could make," Robert Greenstein of the liberal-leaning Center on Budget and Policy Priorities said. "It does not do violence to Medicare as a program that provides the same coverage and benefits to everyone."

Supporters of means testing say the other options for securing Medicare finances are even less palatable, including cutting benefits, raising premiums for everyone, or raising payroll taxes that help support the program.

Both houses of Congress have shown support for means testing in test votes.

The means-testing debate is likely to find its way onto the presidential campaign trail. Sen. John Kerry, D-Mass. was laying out the details Monday of a plan he says will protect Medicare and Social Security and increase access to prescription drug coverage for seniors.

He was to discuss the plan at a seniors' center in Council Bluffs, currying favor with one of the most important groups in Iowa's leadoff precinct caucuses on Jan. 19. Iowa has one of the country's largest percentages of elderly, who traditionally vote in higher numbers than any other age group.

Kerry said his "compact with America's seniors" would ensure the financial stability of Medicare and Social Security, offer a "real" prescription drug benefit under Medicare, boost long-term care coverage for seniors and offer new options to keep the elderly out of nursing homes, and push community involvement efforts, such as mentoring programs designed to draw on the experience of seniors.