Legislative Update: February 2011

Legislative Update: February 2011

By Mike Watson, TSCL Legislative Assistant

Since passage of Medicare in 1965 all seniors received the same benefits for the same standard premium.  But in 2003, Congress took the unprecedented step of passing legislation that required “upper-income” seniors to pay increased premiums for Medicare Part B.  Forcing these seniors to pay more for the same Medicare benefits is known as the “means test.”

Congress last year expanded this program in the healthcare reform act, or the Patient Protection and Affordable Care Act (PPACA), which was signed into law in March 2010.  The PPACA expanded “means testing” to Medicare Part D, and froze the income thresholds at which beneficiaries become subject to the “means test” at the 2010 levels through 2019.  This year, depending on income, individuals who make more than $85,000 and couples who make more than $170,000 will have to pay from $46.10 - $253.70 extra per month for their Part B premiums, and from $12.10 to $69.10 extra per month for their Part D premiums in 2011.

The Senior Citizens League believes that expanding “means testing” to Part D and freezing the income levels through 2019 is a backdoor benefit cut that will eventually affect even middle-income seniors.  The chief reason is that as the economy grows over the next decade, the frozen income thresholds will not increase in-kind, subjecting many more seniors to the “means test.”  The Senior Citizens League estimates that given different inflation scenarios, individual seniors who made between $63,000 and $75,000 in 2010 could be subjected to the “means test” in 2019, because of the frozen income thresholds.  In addition, if the income thresholds for the “means test” had been allowed to increase, (the case before the PPACA was signed into law), we estimate that they would have increased to an amount between $100,500 to $121,800 in 2019.

The Kaiser Family Foundation estimates that the number of beneficiaries that will be required to pay the increased Medicare premiums will almost triple over the next decade rising from five percent of beneficiaries in 2011 to 14 percent in 2019 due to the expansions of “means testing” in the PPACA.  By 2019 one out of every five new enrollees will have to pay higher premiums.  The Senior Citizens League strongly opposes the “means test” and supports efforts to repeal it.  To learn more, please visit www.SeniorsLeague.org.

“Income-Relating Medicare Part B and Part D Premiums: How Many Medicare Beneficiaries Will Be Affected?” Kaiser Family Foundation, Publication No. 8126, December 2010.