President Obama indicated today that he would be open to means-testing Medicare – requiring wealthier seniors to pay more — as part of a compromise plan to reduce the deficit.
“I've said that means-testing on Medicare, meaning people like myself,…you can envision a situation where, for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate,” the president said in response to a question from ABC News. “That could make a difference.”
The president said in any negotiation “we should make sure that current beneficiaries, as much as possible, are not affected, but we should look at what can we do in the out years so that, over time, some of these programs are more sustainable.”
There currently is some means testing for Medicare premiums for physicians as well as for prescription drugs.
Specifically, individual seniors with income of $85,000 or couples making over $170,000 pay somewhat higher Medicare premiums. This is about five percent of current Medicare recipients.
An administration official says that the President today signaled “openness, as part of a potential big deal, to asking Medicare recipients over those high-income thresholds to pay modestly higher premiums. At no point did the Administration express openness to raising premiums on Medicare beneficiaries below those income levels.”
AARP Senior Vice President Joyce Rogers this afternoon attacked the president’s comments, saying that “Medicare is not a welfare program. Seniors pay into Medicare their entire working lives based on the promise that they’ll have secure health coverage when they retire. Applying a means test for their earned benefits would erode the popular support that has sustained these programs for years and made them so effective in helping older households.”
Rogers said that the “small minority of seniors who are wealthy also contributed more to these programs throughout their working lives, and continue to pay higher taxes in retirement to support them. Also, in contrast to plans for those under age 65, premiums for Medicare Part B and Part D already are pegged to income. We believe the right way to strengthen Medicare is to improve the quality and lower the cost of care throughout the health care system. Simply shifting the bill to seniors would be like squeezing one end of a balloon – it does nothing to improve health care quality or combat the real problem of rising costs.”
The president today argued that he would not be willing to go so far as to change Medicare in any major structural way, as has been proposed by House Budget Committee chairman Paul Ryan, R-Wisc. “What we're not willing to do is to restructure the program in the ways that we've seen coming out of the House over the last several months, where we would voucherize the program and you potentially have senior citizens paying $6,000 more.”
“I view Social Security and Medicare as the most important social safety nets that we have,” he said. “I think it is important for them to remain as social insurance programs that give people some certainty and reliability in their golden years. But it turns out that making some modest modifications in those entitlements can save you trillions of dollars. And it's not necessary to completely revamp the program.”
The president also suggested that there could be deficit reduction through savings in pharmaceuticals. “Drug companies, for example, are still doing very well through the Medicare program, and although we have made drugs more available at a cheaper price to seniors who are in Medicare, through the Affordable Care Act, there's more work to potential be done there,” he said.