October 5, 2007


Means Test Sought for Medicare Drug Plan (Jonathan Weisman, 10/05/07, Washington Post)

The Bush administration is advancing a proposal to levy higher premiums and deductibles on upper-income seniors enrolled in Medicare's new prescription drug benefit, raising fees on beneficiaries with incomes over about $80,000 a year, administration officials said yesterday.

The administration is working with Sen. John Ensign (R-Nev.) to attach to upcoming legislation a "means testing" provision that would save the government billions of dollars. In the past, however, similar proposals have been blocked by the furious response of seniors.

"You say it saves money and these people can afford it, but it also eats away at the incomes of seniors. It erodes their sense of the reliability on these federal programs, and it certainly erodes political support," said John Rother, policy director for AARP, the powerful senior lobby.

Exactly the point. Why shouldn't seniors spend the money they've saved on their own health care? And, when you combine means testing with HSAs, where nearly everyone will have saved up enough to pay for late life health care, you effectively end the current federal programs.

Posted by Orrin Judd at October 5, 2007 12:00 AM

Over $80,000 a year income? Wow. And the AARP old folks till want to sponge on the young?

Posted by: ic at October 5, 2007 2:01 PM

The AARP has faults, but, in all fairness, I think they are engaged in pre-emptive opposition. No doubt they believe that once the income cap is set, over time it will get lower and lower.

Actually though, there is much more going on in private industry on this issue than at the Federal level. For example, the GM-UAW agreement to transfer healthcare liability to the union. Or, John Deere's recent change in adding an HSA to retirees.

Posted by: Kurt Brouwer at October 5, 2007 3:04 PM

Once you have HSAs it can go higher and higher without anyone qualifying.

Posted by: oj at October 5, 2007 4:48 PM