Medicare Part B Means-Tested Premium Adjustment

You may recall that the Medicare Part B premiums are means-tested. The adjustments based on 2006 income tax returns have just been published to recipients. The regular premium has been increased to $96.40. For any recipient with income over $82,000, the premium is increased. The amount of the increase depends on the amount of income. The additional monthly premium for 2008 will range from $25.80 to $142, for a maximum cost of $238.40. I does not matter how much social security you receive, the up-charge in premium is based solely on your 2006 income. It does not matter that you paid into the system for your working life (or at least the life of Medicare), the implied promise of equal treatment has been broken. Furthermore, it is my understanding that the income limits are not adjusted for increases in the cost of living, although the premiums are. This will affect more and more people as time goes by.

This is a portent of possible changes to the old age portion of the social security program. That program is already subject to means testing via the tax on a portion of social security payments. Some politicians are talking about a more explicit means-test, reduction of benefits depending on other income.

We need to let our Congressional representatives know that these changes are unacceptable. The best way to save the program for future generations and avoid putting more money into the hands of the politicians is private accounts.

Save Social Security.

What's a Voter to Do?

As the political season heats up, it's time for those of us interested in the issue of Social Security reform to take a look at the current crop of presidential candidates. Of course, at the same time, we cannot take our eyes off the Congressmen and women. Even when we had a president willing to look at private accounts, e.g., Presidents Clinton and Bush, the Congress remained adamantly opposed. Think it has anything to do with the power to buy our votes that the ability to manipulate the present system provides? Or perhaps, it is the pot of money which is spent "off the books." that makes them so reluctant to take any meaningful action.

So what is being proposed? Let's start with two of the front runners. Barack Obama and John Edwards have expressed a willingness to raise or eliminate the cap on wages. That would be an enormous increase in the amount of taxes collected without a commensurate assurance that the money would actually be available to pay benefits.

"Eliminating the cap on payroll taxes would be, by far, the biggest tax hike in U.S. history: more than $1.3 trillion in new taxes over the first 10 years alone. As bad as that would be in the aggregate, it would be even worse for individual workers. A worker earning $103,000 per year would pay $1,240 more in taxes each year." http://www.socialsecurity.org/

Unfortunately, none of the other candidates has been willing to make any specific proposal. So much for profiles in courage.

Save Social Security Now