Pointing Fingers at Ageism
When Did You First Realize You Were Old?

Medicare Surcharge

category_bug_politics.gif Part B is the voluntary portion of Medicare which covers doctors’ services, diagnostic tests and hospital outpatient services for more than 42 million people 65 and older or disabled. The current monthly premium is $88.50. In January 2007, it will increase to $93.50.

Also in January, what Medicare calls a “surcharge” will be instituted for the first time. A more accurate description is “means test” as the premium will increase further for single people with annual incomes of more than $80,000 and for couples filing joint tax returns with annual incomes of $160,000 or more.

The surcharge went almost unnoticed when it was included in the Part D (prescription drug coverage) legislation of 2003 and now, with less than four months to go until it is implemented, outcries are being heard across the land.

Here is a chart (blatantly stolen from The New York Times story published last week) of the means-test surcharges:


Opponents of the surcharge argue that it is unfair, that it turns a social insurance program into a welfare program, and Rep. Nita Lowey (Dem., New York) has introduced a bill to repeal the surcharge. It is worth noting that Ms. Lowey’s 18th Congressional District, just north of Manhattan, includes some of the highest-income bedroom communities in the U.S.

Another argument against the surcharge is that will drive high-income beneficiaries out of the Medicare program and into private insurance. That seems to be a specious argument if it is assumed that people at all income levels wish to keep their personal costs down.

Even the highest surcharged premium – $162.10 per month or $1945.20 annually – is pocket change for a single person with an income above $150,000 a year. For a couple, the total would be $3890.40. I became one of the uninsured in the months before I qualified for Medicare when my private healthcare premium shot up to $900 a month, so I doubt anyone can beat $162.10 in the private sector.

Even at the lowest income level at which the surcharge is assessed - $80,001 for a single person, $160,001 for a couple – the annual premium is $1272 and $2544 respectively. That’s 1.59 percent (single) and 3.18 percent (couples) of income. A bargain.

Some have suggested that the surcharges be indexed to local cost of living. That may be a good idea but in Manhattan, one of the most expensive cities in the U.S., I know plenty of people who earn less than $80,000 a year. They aren’t living high on the hog, but they get by, so I think the $80,000 low-end surcharge is reasonable.

According to Medicare, the surcharge will affect 3.5 percent of beneficiaries, about 1.5 million people. Federal health officials estimate that 9,000 people will drop out of Medicare because of the surcharge (what are they thinking?) and more in 2009, when the surcharges are further increased.

But there is a larger point to be made. Medicare is already stretched to the limits of its means and when the baby boomers begin signing on in five years, the program will be springing leaks. The money must be found to support the program and a small surcharge – less than the cost of a high-end HD television set - is little enough for the haves to give up to help the have-nots.

As with our graduated income tax, it has long been a tenet of American social justice that those who have more, pay more into the system. The haves must ask themselves how much money is enough. And we must all ask ourselves what kind of people are we if we do not provide even basic healthcare to those who cannot afford it.

Long term, a better solution is needed. Universal health coverage for everyone of every age, funded in an entirely different manner, should be adopted, as every other nation in the developed world has. But until we can elect something better than the corrupt, do-nothing Congress we have, which is concerned only with reducing taxes for the rich, this surcharge is the best we’ve got.

At the income levels at which the surcharge has been set, no one can claim to be burdened.


Our National Health system here in the UK used to be the envy of the world. It too is falling apart and if you want a replacement hip you might be better off going private rather than waiting for years. My neighbour had to pay for his heart triple bypass or wait. The inevitable happens and the elderly suffer and/or die. Some long stay patients have actually died of malnutrition in hospital. The latest scam, in order to make the waiting list appear shorter, is to make the patient wait for tests so they are not in the queue for operations. I waited nine months for an MRI scan this year. Good job they found nothing seriously wrong!

Ronni--Slight correction: the percentage of income that the surcharge encumbers is the same for a single person as it is for a married couple.
While I don't call 2.5%-3.2% "pocket change"; I do think that the total amount paid for Medicare Part B is reasonable compared to the private market.
Something that amuses me is that some of the same people who are adamantly against "socialized medicine" can hardly wait for their 65th birthday to roll around so that they are enrolled in Medicare.

It is refreshing to read a down-to-earth editorial with regard to the issue of health care and what I see as promoting some measure of personal responsibility for one’s health care – even to the benefit of others.

I noted that you had a period of time where you were uninsured awaiting Medicare eligibility. I can certainly relate but quite honestly was too much of a chicken to “go for it” as you opted to do. In two weeks I finally become a Medicare recipient myself.

I retired some three years ago and had to maintain my own coverage for about two years. I was covered under COBRA for a period of time but did want to have some measure of health coverage when the COBRA coverage ran out. I finally secured coverage for around $400 a month with a $2500 deductible. Within the past year they have raised their premium on me exactly $200 which in itself almost sent me to Cemeteryville. So my last month’s premium was $600. Even though I am healthy, my healthcare costs for this past year for insurance premiums alone has been over half my yearly Social Security allotment. When I retired I was prepared to take on these high insurance costs for a period of time but that don’t make it right!

It is beyond my comprehension as to why anyone would not want to accept at least a little responsibility for their own healthcare. Especially when doing so causes no real impact to their income and will pass along relief to others farther down the income chain. While I was working I had a good paying job and good healthcare. But I was also reasonably healthy so anytime I did get medical care I paid for it out of my own pocket even though I had insurance. Why? Because I could afford too. But I was also under the false illusion that surely others who could afford it were doing the same….thus helping stave off rising medical insurance costs. But fact is, most folks pretty much thought I had a screw loose. I recall hearing the term “idiot” often.

As I now become a Medicare recipient, my insurance costs will now drop from $600 a month to right at $230 a month for “full” coverage next month. I would run to the bank in a heart beat and throw another $70 a month at that number if I thought it would help “our” situation. I can assure you that I am in the “under $30,000 a year group” so this is not some rich man making these assertions.

If high income Medicare beneficiaries opt to leave the program in response to this surcharge then I have to question how they accumulated their wealth. Surely it wasn’t based on their intelligence. What single individual making say $100,000 a year and is on Medicare is going to opt out of a $350 a month cost for something probably approaching $700 a month or more?

Perhaps we are “pissing in the wind” here but it is nice to experience a moment of relief.

Oh….and if I may add just one note.

I certainly understand the economics and standard of living criteria that must be applied to any yearly income number and subsequent suppositions. If I make $50,000 a year and live in Arkansas and someone else with that income lives in New York City or San Francisco, that yearly income number is subject to two different economic situations. So under those circumstances what is no problem monetarily for one may be of an extreme problem monetarily for another. This is a factor that is most often totally disregarded in debated issues relative to yearly incomes. I just wanted to clarify that point as relates to issues such as the one being aired.

"...we must all ask ourselves what kind of people are we if we do not provide even basic healthcare to those who cannot afford it."

"...until we can elect something better than the corrupt, do-nothing Congress we have, which is concerned only with reducing taxes for the rich, this surcharge is the best we’ve got."

Your words pretty well summed it all up.

I wish I had the problem of being at top level income. You wouldn't hear me complaining. I have no health insurance. I cannot afford it & no one will hire me for a job with insurance because health insurance is so high for elders. There is a program here in Ohio that ostensibly helps those with no insurance but it if you look at it closely, it only covers doctor's visits & need the ER or other services, you wind up with harassment & a nastygram on your credit rating. As a woman of a certain age with a disability I need health care. Social Security says I don't have a disability and can't retire until I'm 66. What is a girl to do? I think I know the answer to that if the leadership of this country has its way.

Yours is a thoughtful and worthwhile analysis of the surcharge issue. If anything, it helps point up the need for a single payer health plan (universal coverage).

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