Proposed MediCare premium increase

[audreyh1]

Why do they have more in income, was it manna from heaven? As I said before, those same people had contributed most into the MediCare system through MediCare tax which had no cap. How many times should the same group be asked to bear the lion share of the burden when their only "fault" was that they worked hard, saved more? Is it fair in your opinion?

So I take it you think it would be more fair to increase every senior's Medicare premium to cover the shortfall in the Medicare system.

We have progressive taxation for Federal income taxes, so I don't see the difference between that and progressive (or less subsidy) premiums for Medicare. Yours seems to be an argument against progressive taxation (or losing subsidy) in general.

 

[meierlde]

Actually recall that medicare comes in 3 parts, part A the part your taxes paid for has no premiums but only covers in patient hospital charges. Part B covers physicians services both in and outside the hospital, as well as home health care issues, part D covers outpatient prescription drugs. What is being talked about are the part B and D parts. It used to be that the premium for everyone under part B was 50 % of the cost but it went to 25% over the last few years. IN 2006 the first adjustment began, I expect eventually they will go for a minum premium of 50% of cost for all. (Note that the rest is paid for by general revenues, not the medicare tax). Likewise for part D.

 

[bondi688]

audreyh1
Every right also should come with a responsibility. So you think 75% of the seniors bear no responsibility whatsoever to address the shortfall of MediCare, and that responsibility should go only to 25% of the seniors? That 25% not only have to pay a higher premium, but some of them have to pay 90% of the cost of the out patient coverage, and that is after they had paid in the most into the MediCare system through uncapped MediCare tax while they were working. And neither MediCare and Social Security were sold to the American public initially as a form of redistribution taxation.

 

[audreyh1]

audreyh1
Every right also should come with a responsibility. So you think 75% of the seniors bear no responsibility whatsoever to address the shortfall of MediCare, and that responsibility should go only to 25% of the seniors? That 25% not only have to pay a higher premium, but some of them have to pay 90% of the cost of the out patient coverage, and that is after they had paid in the most into the MediCare system through uncapped MediCare tax while they were working. And neither MediCare and Social Security were sold to the American public initially as a form of redistribution taxation.

That's interesting - they pay 80% now:

The top [individual] income step -- currently more than $214,000 -- would be lowered to $196,000. And individuals in the new top tier would pay 90 percent of the cost of their outpatient coverage, compared to 80 percent currently.

I don't know, I don't have a strong opinion on the situation - but it looks like a tweak of the current progressive system.

They will probably have to raise rates across the board to some degree regardless.

I'll probably be paying out the nose, but I'm really paying out the nose now.

 

[bondi688]

What I am saying is if there is a problem, that should be everybody's responsibility to chip in to to help solve it. Singling out a minority of people and dump the burden on them is a usual and cheap political ploy that does not actually provide a solution to the problem because it is piecemeal in scoop and nature, but that kind of tactics end up dividing the citizens in to warring factions.

 

[haha]

What I am saying is if there is a problem, that should be everybody's responsibility to chip in to to help solve it. Singling out a minority of people and dump the burden on them is a usual and cheap political ploy that does not actually provide a solution to the problem because it is piecemeal in scoop and nature, but that kind of tactics end up dividing the citizens in to warring factions.

Which is why it is so popular with politicians. Remember "Divide and conquer"?

ha

 

[ERhoosier]

We have progressive taxation for Federal income taxes, so I don't see the difference between that and progressive (or less subsidy) premiums for Medicare. Yours seems to be an argument against progressive taxation (or losing subsidy) in general.

I do not question having a progressive system per se, but rather the effects of increasing progression in the system. At some point the wealthiest get upset enough to relocate their capital to lower tax regions. It's happening in France, and there's some evidence its happening in US too.
France's proposed tax hikes spark 'exodus' of wealthy - Telegraph
Can The Last Taxpayer Leaving France Please Turn Out The Lights? - Forbes
Should You Renounce Your U.S. Citizenship? - WSJ.com

I'm not saying we are quite there yet, but at some point a society must control expenses rather than continuing to increase taxes. US spends far more per capita on HC (17+% of GDP & rising) than any other nation yet has rather mediocre (even poor) population health stats vs other developed nations.
U.S. scores dead last again in healthcare study | Reuters
IMHO- Medicare has become the gov't's latest folly of raising taxes on "the rich" rather than seriously addressing out-of-control and inefficient spending. Kicking this can down the road will, as MichaelB said, bankrupt us. Bankrupt US (as a nation), and us as retirees

 

[audreyh1]

IMHO- Medicare has become the gov't's latest folly of raising taxes on "the rich" rather than seriously addressing out-of-control and inefficient spending. Kicking this can down the road will, as MichaelB said, bankrupt us. Bankrupt US (as a nation), and us as retirees

Good point.

I don't see how we can expect to continue to pay for/subsidize a growing chunk of Medicare out of general revenues either.

 

[MichaelB]

What I am saying is if there is a problem, that should be everybody's responsibility to chip in to to help solve it. Singling out a minority of people and dump the burden on them is a usual and cheap political ploy that does not actually provide a solution to the problem because it is piecemeal in scoop and nature, but that kind of tactics end up dividing the citizens in to warring factions.

After the increase in Medicare premiums - again, just a proposal - everyone will still be enjoying a subsidized premium. For some, the burden of less subsidy.

 

[eytonxav]

What bugs me about these means testing schemes when benefits are finally paid out is that considering those that have paid into medicare over the course of their careers (and I mean those that paid in way more $s than the average) and then they get the privilige to continue doing so when benefits are finally paid out. Isn't the income taxes you pay at that point sufficient to cover the concept of paying your fair share vs charging you additional for such benefits

 

[bondi688]

MichaelB
Agree that one this is only a proposal. And you can look at the situation as whether one is paying more or receiving less of the subsidy, like the glass is half empty or half full. But the one receiving less subsidy had paid in the most into the MediCare system, had likely paid more taxes and will continue to pay more tax in retirement. And the reason why they have to do that was they worked hard, saved and invested and prepared for their own future. Finessing the language does not change the fact they are looked at as the group targeted to bear a larger share of "burden". And the same group is singled out repeatedly, in this and other areas as well.

 

[MichaelB]

Before the proposal. every individual enrolled in Medicare receives a subsidy. After the proposal, every individual enrolled in Medicare still receives a subsidy. I guess I am more concerned about the solvency of the system than fairness of the subsidy.

 

[Brat]

Medicare part A is no cost (paid for by medicare tax during our working years), parts B and D are not free and thus optional. The solution for those who choose not to pay a higher premium for parts B and D is to buy that coverage on the open market if they wish. Somehow I don't think that will be cost effective for high earners even with significant increase in premiums.

With regard to 'fairness'. When we were filling out FAFs for our kids as they entered college I considered the 'deals' that the spendthrift parents of their classmates would get as a result. That wasn't fair either.

 

[JakeBrake]

What's the deadline for taking an RMD?

Generally, you must take your first RMD by April 1 of the calendar year following the year you turn 70½. (Participants in employer plans who are still working at age 70½ may be permitted to wait until April 1 of the calendar year following the year they retire.) For each subsequent year, you'll need to take your annual RMD by December 31.

By extremely careful planning on my parents' part (Amazingly,they never heard of an IRA or RMD.), my birthday is in early July. This gives me the maximum time before I have to pay RMD's.

 

[travelover]

........
By extremely careful planning on my parents' part (Amazingly,they never heard of an IRA or RMD.), my birthday is in early July. This gives me the maximum time before I have to pay RMD's.

Congratulations on choosing such smart parents.

 

[packrat44]

With regard to 'fairness'. When we were filling out FAFs for our kids as they entered college I considered the 'deals' that the spendthrift parents of their classmates would get as a result. That wasn't fair either.

That irritated DW and me back when our children started college. We personally knew those who made considerably more than us and lived the good life that qualified for the deals and we did not because we were frugal.

A long time ago my daughter (about 10 at the time) had come home from school all upset. At the end of her spilling her guts,she made the statement "....and that is not fair." I told her there are a lot of situations we will encounter in life that are not fair. It has been that way in the past and will be that way in the future.

 

[scrinch]

Congratulations on choosing such smart parents.

+1!

In contrast, my father planned poorly and passed away at age 71, less than a year after his first RMD. That caused his heirs to have to start taking RMD's on their inherited IRA's in their 40's. But he did help minimize our pesky tax problem by investing his IRA in tech stocks just before the bubble burst.