October 5, 2007

Bush Administration Makes New Push to Dismantle Medicare

The same week President Bush vetoed the bi-partisan Children’s Health Insurance Program compromise bill, he went one step further and revived a proposal to apply a ‘means test’ for Medicare’s Prescription Drug benefit. The unfairness of applying a means test for seniors that spent their whole lives paying into a system with guaranteed benefits, proves that the President doesn't share America's values.

The Bush Administration is Seeking to Create a Means Test in the Medicare Prescription Drug Benefit. According to the press, “The Bush administration is advancing a proposal to levy higher premiums and deductibles on upper-income seniors enrolled in Medicare’s new prescription drug benefit, raising fees on beneficiaries with incomes over about $80,000 a year.” In the past, similar proposals were blocked by the furious response of seniors. “You say it saves money and these people can afford it, but it also eats away at the incomes of seniors. It erodes their sense of the reliability on these federal programs, and it certainly erodes political support,” said John Rother, policy director for AARP. The plan was originally drafted as part of President Bush's fiscal 2008 budget, but it died this spring with little notice. [Washington Post, 10/5/07]

The Senate Voted Down a Similar Means-Testing Proposal in March. Senator John Ensign authored an amendment that required beneficiaries with annual incomes above $80,000 and couples with income above $160,000 to pay a larger share of their Medicare Part D premium. The measure mirrored the Bush administration’s proposal. [S Con Res 21, Senate Vote 93, 3/22/07]

Means Testing Would Drive Middle-Income Seniors Out of Medicare, Leaving it For the Poorest, And Causing it to Potentially Go Insolvent.  According to Yale University’s, Theodore Marmor, writing with welfare expert Jacob Hacker, “The means-testers on the right have found a political wedge issue that splits Medicare advocates on the left. But those worried about low-income citizens should not fall into the trap. ... This seemingly sensible step forward represents a fundamental step backward. It should be rejected, as it was by Medicare’s founders.” As seniors issues columnist Saul Friedman wrote, “While many believe that the affluent should pay more, means testing radically changes the universal nature of Medicare, and subjects beneficiaries to searches of their financial records. If the younger, healthy and affluent leave Medicare rather than take the means test in order to pay higher premiums, as advocates have warned, Medicare would become a program for the sick, old and poor.”  [Newsday, 10/25/03; Newsday, 5/6/06 (emphasis added)]

Means Testing Undermines What the Creators of the Program Wanted, The Universality of Medicare. Medicare was created to provide would universal benefit regardless of income. As Rep. John Dingell pointed out in 2003, “In 1965, when the Medicare program was created, it was on the premise that all seniors should be treated equally. Medicare, established as a universal program, ensured that all Medicare beneficiaries, no matter where they lived or what their income, would be eligible for the same basic benefits. It was set up so that all would pay into a trust fund during their working years and in return all would receive health insurance in their golden years.” [Center for Budget and Policy Priorities, 7/31/03; House Committee on Energy and Commerce Democrats, 7/22/03 (emphasis added)]

A Means Test Would Create Program Inefficiencies and Administrative Problems. A Medicare Part D means test would almost certainly be costly and inefficient to administer since Medicare offices lack information on beneficiaries’ current incomes, since Social Security offices, which administer Medicare, have no information on beneficiaries’ current incomes. [Center for Budget and Policy Priorities, 4/7/97]

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