“We Can’t Wait” to Reform Medicare — But Will Democrats Dither for Political Gain?
Given the President’s recent “We Can’t Wait” campaign, it’s worth pointing out that one thing that cannot wait is reform of the fiscally troubled Medicare program. Even Democrats have admitted that Medicare is in desperate need of reform; the President’s Chief of Staff, Bill Daley, said in July that Medicare “will run out of money in five years if we don’t do something.” And the President himself acknowledged that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up. I mean, it’s not an option for us to just sit by and do nothing.”
That’s why Republicans have proposed solutions to Medicare’s funding shortfalls. The Republican payroll tax alternative starts the reform process by expanding means testing under the Medicare program in two ways:
- The legislation creates two new upper means testing brackets. Under current law, all beneficiaries with adjusted gross income over $214,000 pay 80 percent of their Medicare premiums under Parts B and D, with the federal government paying 20 percent. (More information on current means testing levels is available here.) The bill provides that beneficiaries with adjusted gross income over $750,000 but under $1,000,000 would pay 95 percent of the Medicare premium (with the federal government paying the remaining 5 percent), and beneficiaries with income over $1,000,000 would pay the full cost of their Medicare Part B and D benefits, with no federal subsidy provided.
- The bill extends the freeze on the threshold amounts for means testing. The health care law froze the means testing thresholds – which begin at $85,000 for a single beneficiary and $170,000 for a family – through 2019. The bill would extend the freeze on those thresholds through 2022.
The President’s most recent deficit submission proposed additional means-testing, but delayed these critical changes to the program until 2017 – once he will be out of office. But if the President’s Chief of Staff believes Medicare will go broke by 2016, then “We Can’t Wait” to reform Medicare until after President Obama leaves office, or even until after the President’s re-election campaign – we need to reform Medicare NOW.
Democrats have demonstrated their eagerness to impose a trillion-dollar tax hike within mere months. The upcoming vote on the Republican payroll tax alternative will show whether Democrats itching for a massive tax increase are similarly eager to raise Medicare premiums on millionaires and billionaires to help improve Medicare’s solvency – or do not want to reform Medicare before the presidential election, because they would rather gain politically than fix the problem.