House Republicans Propose Major Medicare Premium Increase

Posted on: December 13th, 2011 by Lawrence A. Friedman

While Republicans continue to thwart President Obama’s proposals to increase taxes on people earning over $250,000 or even $1,000,000, House Republicans are expected to pass legislation that describes people earning over $80,000 (families earning over $160,000) as high earners who must pay far higher Medicare premiums. Current law sets higher Medicare premiums for individuals earning more than $85,000 and families with incomes over $170,000 and adjusts these thresholds for inflation. The House Republicans’ plan would cut or freeze the high earner income thresholds until 25% of Medicare participants are subject to the high earner premiums. This would trigger a five fold increase in the percentage of Medicare participants facing the higher premiums. Where less than 5% of Medicare participants now pay higher earner premiums, 25% would face the higher charges under the House Republicans’ plan– a dramatic increase in Medicare costs for many Americans of retirement age. Republicans maintain that they simply are cutting federal health care subsidies to better off seniors, but some advocates counter that the change is equivalent to a middle class tax hike since it would force many Medicare participants to pay more to the federal government.

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