Obama Proposes Medicare "Means Testing" Overhaul

By: Associated Press
By: Associated Press

The Obama administration has revealed that its plan to increase Medicare premiums for upper-income seniors would create five new income brackets to squeeze more revenue for the government from the top tiers of retirees.
First details of the plan emerged today after Health and Human Services Secretary Kathleen Sebelius testified to Congress on the president's budget which was released two days earlier. The budget included only a vague description of a controversial proposal that has grown more ambitious since Obama last floated it.
"Means testing" has been part of Medicare since the George W. Bush administration, but ramping it up is bound to stir controversy. Republicans are intrigued, but most Democrats don't like the idea.
The plan itself is complicated. The bottom line is not: more money for the government.
Obama's new budget calls for raising $50 billion over 10 years by increasing monthly "income-related" premiums for outpatient and prescription drug coverage. The comparable number last year was $28 billion over the decade.
Currently, single beneficiaries making more than $85,000 a year and couples earning more than $170,000 pay higher premiums. Obama's plan would raise the premiums themselves and also freeze adjustments for inflation until 1 in 4 Medicare recipients were paying the higher charges. Right now, the higher monthly charges hit only about 1 in 20 Medicare recipients.


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