MEDICARE REFORM: Means-Testing May Pose Problem

      CongressDaily/A.M. columnist Julie Rovner cautions that backers of the means-testing component of Sen. John Breaux's (D-LA) premium support proposal should remember the infamous seniors revolt against the Catastrophic Coverage Act. The Breaux plan would have seniors with incomes over $40,000, or $50,000 per couple, pay 25% of their premiums, compared with 12% to 17% for most other Medicare beneficiaries. On the surface, the concept of means-testing seems to be popular: 60% of beneficiaries support sliding scale premiums based on income, according to a Kaiser Family Foundation survey. The problem, argues Marilyn Moon of the Urban Institute, comes with defining what constitutes "high income." She said, "We've had four years of Republicans talking about middle-class tax cuts for people with incomes up to $200,000," yet Breaux's plan places the mark at $40,000. The American Association of Retired Persons' Martin Corry said there is a "disconnect between what the policy wonks think of as upper income and what the public thinks of as upper income." He argues that incomes between $40,000 and $60,000 "are still considered in most parts of the country to be middle income and middle class." Rovner reports the dilemma for policymakers "is that making the income thresholds high enough to truly reach only the upper- income beneficiaries simply does not raise enough money to make much of a difference. On the other hand, reaching down too low runs the risk of a catastrophic-like revolt from those who hardly consider themselves affluent" (Rovner, 2/11).