Speakout: Medicare means testing a costly slip

Ralph Mccutchen

Published September 1, 2006 at midnight

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For the first time since Medicare's creation 41 years ago, seniors will no longer pay the same amount for the same services. Premium rates for Part B - expected to be announced later this month by the Department of Health and Human Services for 2007 - now will be means tested, that is, determined based on income. As a result, as many as 2.3 million seniors will have to pay dramatically more for a benefit intended to help protect the hard-earned assets of these older Americans. In fact, some seniors will have to bear the burden of as much as 80 percent of the monthly premium cost by 2009, despite the fact that they've paid the most into the system through taxes.

Medicare Part B covers medical services vital to aging Americans - doctors' visits, tests, durable equipment and outpatient hospital care. Already beneficiaries have seen their premiums jump from $54 per month in 2002 to $88.50 per month this year. Starting next year, seniors whose incomes are below $80,000 can expect to pay at least $98.40 per month, a hike that far exceeds the rate of Social Security's annual cost-of-living increase. But over the next 2 1/2 years, as inflation rises and energy costs continue to soar, eating away at painstakingly built nest eggs, the cost of premiums will nearly double, triple or even quadruple for seniors with annual incomes exceeding $80,000 who have, like the rest, planned and budgeted their retirements. Seniors with incomes of $100,000 a year, for example, will see their premiums skyrocket 279 percent by 2009.

Although it might seem like a good idea to rescue an ailing system by having wealthy seniors carry a larger share of the load, this move will ultimately hurt the most vulnerable members of our society. According to the Centers for Medicare and Medicaid Services, an estimated 50,000 seniors - a number that will surely climb in the future as premiums increase - are expected to drop their Medicare Part B coverage next year when their premiums go up.

Those seniors are likely the ones without pre-existing health problems, who find it easiest to qualify - and pay for - private insurance. Left behind will be the sickest and poorest.

Means testing will save barely three-tenths of 1 percent of Medicare's budget over the next 10 years, according to the Congressional Budget Office.

With looming budget deficits, it is only logical to presume that this is just the first group of Medicare recipients that will be targeted for means testing. Next could be those with $60,000 in income. Or $40,000. As large numbers in each group opt out, the system will become increasingly unaffordable to those left behind as premiums and deductibles soar.

Even more disturbing is how this provision got passed. There was no conversation with the American people and little congressional debate.

That's because Part B means testing was not in either version of the bills originally passed by the House or Senate. A few key leaders slipped the revision into the massive 2003 Medicare Modernization Act in a closed session right before the congressional vote.

Now that the results of that vote are about to take effect, it's time to pay attention to a law that will cost more than it saves, one that could lead Medicare to become even more crippled as it becomes a welfare-like subsidy rather than the health safety net it was intended to be.

We support Democratic New York Rep. Nita Lowey's "Medicare Part B Premium Fairness Act," H.R. 5147, which would repeal means testing, helping to ensure the long-term viability of the system.

Americans should have been part of the debate before a law that affected so many people was passed. Now we have a chance to reclaim true equity for one of America's greatest success stories.

Ralph McCutchen is chairman of TREA Senior Citizens League, a national nonpartisan seniors organization. He lives in Colorado Springs.

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