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Medicare Premium Increases 

Sept. 10, 2006 (WA).  With the increase in income, Medicare premiums for 2007 also increases. Higher-income individuals are required to pay higher Medicare premiums as opposed to other beneficiaries next year. This is in consonance with the governments bid in helping this financially ailing program remain solvent over the long term. This shift in implementing the program is a major departure from the traditional concept where higher income individuals generally paid the same premium.
  
      Individuals with incomes exceeding $80,000 and married couples with more than $160,000 of income are expected to be affected by this campaign. This would cover about 1 million to 2 million beneficiaries. As for individuals acquiring income over $200,000, the premium would increase to $88.50 per month and a surge of up to four times is expected by 2009.

      This surcharge as framers of this campaign call it was established under a provision of the 2003 law which correspondingly added a prescription drug benefit to Medicare. Crusaders of this program state that it is but logical for wealthy people to pay more particularly when Medicare costs are soaring. The downside is that there might be a distant possibility that wealthy retirees may opt to abandon the program and rely on private insurance instead, leaving Medicare with less-privileged people.

      The premium covered by the campaign is Part B Medicare, which includes a voluntary program that covers doctors’ services, outpatient hospital care and diagnostic tests. The Social Security Administration has repeatedly stated that Medicare is financially unsustainable in its current format. Although the surcharge may come as a shock to many people because they failed to receive any warning of the same, this is not new since the amount of Medicare premiums for Part B has been consistently increasing at a rapid pace even without a surcharge. The program has experienced an average of 12% increase a year since it was $50 a month in 2001.

      The present administration plans to provide a table of surcharge that would cover increases from 2007 to 2009. Earlier this year, Medicare officials have estimated that it would be $98.40 a month. Under the present legislation, the $80,000 threshold and the income brackets will be adjusted each year to keep pace with inflation, as measured by the Consumer Price Index.

      About 40 million people are currently under Part B Medicare. Officials estimate that more than 2 percent of them would have to pay surcharge next year. Civil organizations who oppose said campaign state that the new income-related premiums are fundamentally repugnant with the premises of social insurance.  A huge number of upper-income individuals would eventually find alternatives to Part B Medicare.

 

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