GOP: Raising Taxes On Millionaires A Non-Starter, But Hiking Taxes On Medicare Retirees Is A-OK

The Associated Press’ Ricardo Alonos-Zaldivar has this devastating take of the House GOP’s proposal to pay for a payroll tax cut by further means testing the Medicare program:

Raising taxes on millionaires may be a non-starter for Republicans, but they seem to have no problem hiking Medicare premiums for retirees making a lot less. The House is expected to vote Tuesday on a year-end economic package that includes a provision raising premiums for “high-income” Medicare beneficiaries, now defined as those making $85,000 and above for individuals, or $170,000 for families….Just the top 5 percent of Medicare recipients currently pay higher premiums, a change that took effect a few years ago. The new GOP proposal would expand that over time to include the highest-earning one-fourth of seniors. […]

Currently the high-income premiums start at 35 percent of the cost of Medicare’s outpatient and drug coverage for individuals making $85,000 year, and rise to 80 percent of the cost at the very top income brackets….The House GOP plan would increase the high-income premium by 15 percent in 2017 and lower the thresholds at which the higher fees kick in. Most significantly, it freezes those income thresholds indefinitely, until one-fourth of Medicare recipients are paying “high-income” premiums. It’s unclear how long that would take, but currently only about 2 million out of 47 million Medicare beneficiaries pay higher premiums. Eventually that number would easily surpass 10 million.

President Obama and Nancy Pelosi have signaled that they were open to increasing means testing in the program as part of a larger deficit reduction deal, but defenders of Medicare worry that asking some people to pay more would undercut political support for the program and help build momentum for the kind of Paul Ryan reforms that would privatize and destroy it as a government benefit for all, regardless of income.

It’s also not clear that more seniors can afford to pay more for health care. “Half of seniors had income lower than $22,000 in 2010; 25 percent had income lower than $13,000. Only five percent had incomes above $85,000,” a recent study found. Health care spending “accounted for an average of nearly 15 percent of the average Medicare household’s budget in 2009, according to another Kaiser study. That’s three times the health care spending for those not on Medicare.”

The White House has issued a veto threat against the bill, noting “H.R. 3630 seeks to put the burden of paying for the bill on working families, while giving a free pass to the wealthiest and to big corporations by protecting their loopholes and subsidies.”