Medicare Conferees Consider Proposal To Charge Higher Premiums for Higher-Income Beneficiaries
Negotiators charged with reconciling the House and Senate Medicare bills (HR 1 and S 1) are "seriously considering" requiring beneficiaries with higher incomes to pay higher premiums than other beneficiaries, the New York Times reports. Most of the 40 million beneficiaries currently pay $58.70 per month, or about $704 per year, for Medicare Part B, which covers outpatient services. Under one proposal being considering by negotiators, premiums for beneficiaries whose incomes are above a certain benchmark, possibly between $75,000 and $100,000 per year, would rise gradually based on income. The proposal calls for premiums for individual beneficiaries whose incomes surpass $200,000 per year to triple to about $2,100 per year. Although the Senate Medicare bill does not include a means-testing provision, senators approved in a "test vote" a proposal by Sen. Diane Feinstein (D-Calif.) that would raise premiums for individuals whose incomes are above $100,000 per year or couples with household incomes above $200,000. That proposal would affect about 2% of total Medicare beneficiaries. The House bill includes a "more complicated plan" that would require beneficiaries with higher incomes to spend more out-of-pocket for prescription drugs before catastrophic coverage kicked in. According to the Times, Medicare beneficiaries with higher incomes already pay more into Medicare through higher payroll taxes, which are the same percentage, regardless of income.
Sen. Don Nickles (R-Okla.) has said that increasing premiums for higher-income beneficiaries is a "sensible, progressive way" to slow down the Medicare spending growth rate, the Times reports. Senate Majority Leader Bill Frist (R-Tenn.) said that Medicare negotiators have a "mandate" to raise premiums for higher-income beneficiaries. Some Democrats and liberal policy experts -- who in the past have "vehemently opposed" means testing -- have now said that they are "receptive" to such a proposal to avoid future service cuts, the Times reports. Robert Greenstein, executive director of the Center on Budget and Policy Priorities, said, "[Means testing] is one of most reasonable, most justifiable, least-painful changes you could make. It does not do violence to Medicare as a program that provides the same coverage and benefits to everyone." Robert Reischauer, president of the Urban Institute, said that "asking upper-income elderly people to pay a little more" in premiums is a better alternative than increasing payroll taxes, raising premiums across-the-board or cutting benefits. Feinstein said, "Higher-income beneficiaries can afford to pay a larger share of Medicare's costs." Robert Ball, commissioner of the Social Security Administration from 1962 to 1973 said, "I don't see an objection to having an income-related premium. 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." But Sen. Edward Kennedy (D-Mass.) said he is concerned that increasing premiums would prompt higher-income seniors to leave the program and pass on more costs to lower-income beneficiaries. Other Democrats have said political support for Medicare will diminish if higher-income beneficiaries have to pay larger premiums than other beneficiaries. AARP and the United Auto Workers also reportedly oppose means testing under Medicare, the Times reports (Pear, New York Times, 10/6).
Negotiators attempting to reconcile the House and Senate Medicare bills have tentatively agreed to create a federal program to help doctors with the cost of complying with a provision in the final bill that requires them to write prescriptions electronically, the AP/Las Vegas Sun reports. The electronic prescription provision aims to reduce medical errors, particularly those that result from illegible physician handwriting. Lawmakers also deferred a decision on whether the program should be mandatory or voluntary. Proponents of the program said it also would help prevent seniors from taking drugs that could adversely interact with other medications. However, the American Medical Association, the American College of Physicians and state medical societies lobbied against it, calling it an "unfunded mandate," the AP/Sun reports (Espo, AP/Las Vegas Sun, 10/6).
Some Democratic members of the conference committee have expressed discontent over their exclusion from recent meetings, CongressDaily reports. Recent meetings in conference committee Chair Bill Thomas' (R-Calif.) office have included only two Democrats -- Sens. Max Baucus (Mont.) and John Breaux (La.). Sen. John Dingell (D-Mich.), one of the conferees, said, "[Democrats] have been appointed conferees, but we have not been serving in that capacity." At a meeting with President Bush at the White House to discuss Medicare negotiations, Rep. Charles Rangel (D-N.Y.) said he thanked Bush for the meetings because it was his only chance to learn of the progress of negotiations. Rangel said, "I said it was the first chance I'd had to talk to Chair Thomas about prescription drugs. [Democrats] don't count as conferees, and [Republicans] don't even give the courtesy of acting like we count." Dingell said, "The fact that Democrats are excluded means that (conferees) are veering right, and for that, they will get a fine filibuster in the Senate." Senate Minority Leader Tom Daschle (D-S.D.) said, "It doesn't bode well for the bill. If [Republicans are] not inclusive in bringing the conferees together, they're not going to be able to pass a bill." Sen. Charles Grassley (R-Iowa), one of the conferees, said last week that meetings will continue this week -- many via telephone -- while the Senate is on recess (Heil, CongressDaily, 10/3).
Medicare conferees are "no closer to a final bill" than when they began work three months ago, Long Island Newsday reports. Several lawmakers involved in negotiations have said there is "much to be done" to reach compromise on a final Medicare bill that can overcome "partisan bickering," satisfy beneficiaries and pass both chambers (Barfield Barry, Long Island Newsday, 10/5). There is "diminishing political will" for creating a Medicare prescription drug benefit, according to the Boston Globe. Although such a move once appeared to be something that "both parties could embrace," it now seems as if "plans for drug coverage are nearly doomed," the Globe reports (Milligan, Boston Globe, 10/6). Leighton Ku, a senior health policy fellow at the Center on Budget and Policy Priorities, said, "[Negotiators] are kind of stuck. The bottom line remains -- they have moved very slowly. They know there's heavy pressure to complete some kind of bill, but the details on the key issues are still as mysterious as they were months ago." Many Democrats said that reaching a final compromise by Oct. 17 -- the deadline set in a timeline proposed by lawmakers last month -- is impossible, Newsday reports. "Even if [negotiators] work 24/7 it would be hard to imagine that happening. [Negotiations are] a mess," an unnamed Democratic aide said. "It's not easy. ... It's complex stuff," Sen. Orrin Hatch (R-Utah) said. But he added, "By the 17th, we ought to have something pretty well put together." Rep. Nancy Johnson (R-Conn.) said, "These are very big bills. It takes time." David Certner, director of federal affairs for AARP, said, "If the White House wants a bill, and by all accounts it does, they'll have to play a role to make it happen" (Long Island Newsday, 10/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.