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Proposed MediCare premium increase
04-12-2013, 02:39 PM
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#1
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Full time employment: Posting here.
Join Date: Dec 2010
Posts: 576
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Proposed MediCare premium increase
APNewsBreak: Upper income seniors' Medicare hike
Quote:
Health and Human Services Secretary Kathleen Sebelius testified today before the Congress on the president's budget. The details had not been provided when the budget was released earlier in the week
" If the proposal passed , starting in 2017, there would be nine income brackets on which the higher premiums would be charged. 1 in 4 recipients will see the premium increased.
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04-12-2013, 03:31 PM
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#2
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Thinks s/he gets paid by the post
Join Date: May 2011
Location: South Eastern USA
Posts: 1,068
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Uh-oh! This would affect us.
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04-12-2013, 03:41 PM
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#3
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,708
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For us Medicare is a great deal, much less expensive than private health care insurance. Our spending projections, however, assume healthcare will cost what it does now (full private rates) plus inflation. Still have 5 years to go, healthcare costs represent most of the projected public spending deficit, and means testing upper income individuals is hard to avoid when the numbers get that big.
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04-12-2013, 04:59 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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I'm sure this is a misunderstanding, Secretary Sebelius was probably just misquoted.
". . . no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
This will all get straightened out by tomorrow.
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04-12-2013, 06:25 PM
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#5
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Recycles dryer sheets
Join Date: Mar 2013
Location: Scarsdale
Posts: 180
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Quote:
Originally Posted by samclem
I'm sure this is a misunderstanding, Secretary Sebelius was probably just misquoted.
". . . no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
This will all get straightened out by tomorrow.
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While I share your sentiments, this is a premium increase and not a tax increase. I do oppose this proposed change though. I feel the medicare premium, like social security, should be a function of how much you paid into the system. The more you paid the greater the government subsidy in premium. As far as I am concerned, I am budgeting for the fact that when we do get medicare it will cost 5000 2013 inflation adjusted dollars a year for each one of us in which is really the highest bracket today plus some more. I might need to up that estimate given the fact that this system will eventually break down and premiums have another surge to pay for cost in the near future.
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"There are no solutions...there are only trade-offs." - Thomas Sowell
Looking to retire or semi-retire by 45 based on our net worth going to $6 million outside our house.
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04-13-2013, 09:01 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2011
Posts: 1,797
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Quote:
Originally Posted by MichaelB
...... healthcare costs represent most of the projected public spending deficit, and means testing upper income individuals is hard to avoid when the numbers get that big.
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However part of the widespread public support for Medicare has been its universality. All-for-one-and-one-for-all. Now even conservative Fox News is reporting this big means-tested increase in Medicare premiums affecting (eventually) 25% of folks may begin to undermine political support for the Program. Scary thought, indeed.
Medicare hike in Obama budget could hit some in middle class | Fox News
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04-13-2013, 10:04 AM
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#7
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Full time employment: Posting here.
Join Date: Dec 2010
Posts: 576
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It is interesting the original AP breaking article was titled
Upper income seniors' MediCare hike
And the follow up article in Yahoo News is titled:
Medicare hike could also hit some in the middle class.
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04-13-2013, 11:34 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
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Obama said that 25% of seniors will be paying the higher rates. Well, seniors overall are not a wealthy group. I imagine that almost any person who felt empowered to retire early, will fall into the upper 25%, and pay more.
If I understood what Michael B said, he expects that we will eventually pay the full cost of medical care. IMO, in America, this is effectively impossible. Given our costs over here, just imagine what a market rate health policy would cost for an 82 year old, or a 92 year old.
Industry lobbyists would not approve, but we would either have to get real reform of health insurance, or on turning 65 head of to whatever country is still backward enough to have some spare capacity.
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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04-13-2013, 02:44 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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Quote:
Originally Posted by ERhoosier
However part of the widespread public support for Medicare has been its universality. All-for-one-and-one-for-all. Now even conservative Fox News is reporting this big means-tested increase in Medicare premiums affecting (eventually) 25% of folks may begin to undermine political support for the Program. Scary thought, indeed.
Medicare hike in Obama budget could hit some in middle class | Fox News
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The NM woman in the article was complaining that government required RMD's would push her over the income limit and increase not only her income taxes but also her medicare costs. She drives an 18 yr old car and lives in a modest 58 yr old home that needs improvements.
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“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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04-13-2013, 02:56 PM
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#10
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Recycles dryer sheets
Join Date: Mar 2013
Location: Scarsdale
Posts: 180
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Quote:
Originally Posted by haha
Obama said that 25% of seniors will be paying the higher rates. Well, seniors overall are not a wealthy group. I imagine that almost any person who felt empowered to retire early, will fall into the upper 25%, and pay more.
If I understood what Michael B said, he expects that we will eventually pay the full cost of medical care. IMO, in America, this is effectively impossible. Given our costs over here, just imagine what a market rate health policy would cost for an 82 year old, or a 92 year old.
Industry lobbyists would not approve, but we would either have to get real reform of health insurance, or on turning 65 head of to whatever country is still backward enough to have some spare capacity.
Ha
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The result is obvious. Everyone will try to use class warfare camouflage and disguise their income to try to avoid these extra costs. Winners are the accountants.
__________________
"There are no solutions...there are only trade-offs." - Thomas Sowell
Looking to retire or semi-retire by 45 based on our net worth going to $6 million outside our house.
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04-13-2013, 02:57 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Location: Rio Grande Valley
Posts: 38,140
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Quote:
Originally Posted by Bikerdude
The NM woman in the article was complaining that government required RMD's would push her over the income limit and increase not only her income taxes but also her medicare costs. She drives an 18 yr old car and lives in a modest 58 yr old home that needs improvements.
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I'm trying to get my head around this.
She has enough money in tax-deferred accounts that it would push up her premiums slightly when she meets the government-mandated RMDs.
Yet she needs to make improvements in her home. But she doesn't want to touch her tax-deferred savings because it'll increase her annual expenses, even though it means even more annual income and some of that could pay for her home improvements.
No one ever promised folks the money could stay in tax-deferred accounts forever. They knew that one day the money would have to be withdrawn and income taxes paid on the withdrawal. I suppose the tough part is that more annual income means less subsidy on things like Medicare premiums. Back in the old days it wasn't means tested (at least not to the current degree).
On the whole, are seniors really a less wealthy group than younger folks? I really wonder about that.
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Retired since summer 1999.
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04-13-2013, 02:59 PM
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#12
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Recycles dryer sheets
Join Date: Mar 2013
Location: Scarsdale
Posts: 180
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Quote:
Originally Posted by audreyh1
I'm trying to get my head around this.
She has enough money in tax-deferred accounts that it would push up her premiums slightly when she meets the government-mandated RMDs.
Yet she needs to make improvements in her home. But she doesn't want to touch her tax-deferred savings because it'll increase her annual expenses, even though it means even more annual income and some of that could pay for her home improvements.
No one ever promised folks the money could stay in tax-deferred accounts forever? They knew that one day the money would have to be withdrawn and income taxes paid on the withdrawal. I suppose the tough part is that more annual income means less subsidy on things like Medicare premiums. Back in the old days it wasn't means tested (at least not to the current degree).
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If I understand correct, for 401K for example, there are rules that once you hit 70 there are minimal annual withdraw rates per year.
__________________
"There are no solutions...there are only trade-offs." - Thomas Sowell
Looking to retire or semi-retire by 45 based on our net worth going to $6 million outside our house.
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04-13-2013, 03:01 PM
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#13
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,708
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Quote:
Originally Posted by haha
If I understood what Michael B said, he expects that we will eventually pay the full cost of medical care. IMO, in America, this is effectively impossible. Given our costs over here, just imagine what a market rate health policy would cost for an 82 year old, or a 92 year old.
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I explained myself poorly. My household is currently paying the full rate - unsubsidized, not underwritten and fully priced for age. Medicare prices are lower and subsidized, but I do not personally expect to receive this benefit and have budgeted what we are currently paying plus inflation.
Quote:
Industry lobbyists would not approve, but we would either have to get real reform of health insurance, or on turning 65 head of to whatever country is still backward enough to have some spare capacity.
Ha
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Well, something pretty drastic needs to happen, because healthcare costs will otherwise bankrupt us.
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04-13-2013, 03:23 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
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Quote:
Originally Posted by kmt1972
If I understand correct, for 401K for example, there are rules that once you hit 70 there are minimal annual withdraw rates per year.
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Yes, that's correct - you have to start withdrawing the tax-deferred money the year you reach 70 1/2 and pay income taxes on it. There is a minimal % you must withdraw every year for the rest of your life.
I guess what people don't like is that money is counted as income for Medicare premium rates and taxes on Social Security. It wasn't counted as income when it was deferred, but now the appreciated amount has to be counted as income when it's withdrawn. That was the deal on tax-deferred retirement savings.
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04-13-2013, 03:32 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Location: Texas: No Country for Old Men
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Quote:
Originally Posted by audreyh1
There is a minimal % you must withdraw every year for the rest of your life.
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Further, that % increases each year, beginning at 3.7% at age 71 and gradually increasing to a whopping 52.6% at age 115.
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Numbers is hard
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04-13-2013, 03:34 PM
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#16
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gone traveling
Join Date: Mar 2007
Posts: 559
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Quote:
Originally Posted by audreyh1
Yes, that's correct - you have to start withdrawing the tax-deferred money the year you reach 71 and pay income taxes on it. There is a minimal % you must withdraw every year for the rest of your life.
I guess what people don't like is that money is counted as income for Medicare premium rates and taxes on Social Security. It wasn't counted as income when it was deferred, but now the appreciated amount has to be counted as income when it's withdrawn. That was the deal on tax-deferred retirement savings.
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actually its 70 and 1/2. that might or might not be the year you turn 71.
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04-13-2013, 03:35 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Oh no! At that rate you might run out of money! Wait.......
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Retired since summer 1999.
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04-13-2013, 03:36 PM
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#18
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Administrator
Join Date: Jan 2008
Location: Chicagoland
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Quote:
Originally Posted by audreyh1
On the whole, are seniors really a less wealthy group than younger folks? I really wonder about that.
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Very difficult to say. So many studies don't consider the value of SS or housing assets. I suspect that including these and other pension annuities there is considerable wealth in seniors, but it is probably not distributed well. The target group here is the top quartile.
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04-13-2013, 03:41 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by gerrym51
actually its 70 and 1/2. that might or might not be the year you turn 71.
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I had already corrected the above (it was just a rounding error anyway )
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Retired since summer 1999.
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04-13-2013, 03:41 PM
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#20
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Full time employment: Posting here.
Join Date: Dec 2010
Posts: 576
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'The target group here is the top quartile"
And it is that group that paid the most into the MediCare system because they paid MediCare Tax with no cap to the last dollar earned. In return, they have to pay the highest premium and get the least in coverage in retirement.
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