Proposed MediCare premium increase

[audreyh1]

Quote:

Originally Posted by MichaelB 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.

I see lots of wealthy seniors. I would suspect that the top 25% might be quite better off than younger folks in general. Or maybe it's a smaller percent than 25.

[bondi688]

Quote:

Originally Posted by audreyh1 I see lots of wealthy seniors. I would suspect that the top 25% might be quite better off than younger folks in general. Or maybe it's a smaller percent than 25.

The wealthy seniors achieved that through a lifetime of working, saving and investing. They already will pay more in income tax by virtue of the fact that they saved the money for their retirement. How many times should the system turns on them to ask them to shoulder more because they have saved for themselves and their families?

[audreyh1]

Quote:

Originally Posted by bondi688 The wealthy seniors achieved that through a lifetime of working, saving and investing. They already will pay more in income tax by virtue of the fact that they saved the money for their retirement. How many times should the system turns on them to ask them to shoulder more because they have saved for themselves and their families?

So you would rather see Medicare premiums raised across the board than only for the top 25% in annual income?

[bondi688]

Quote:

Originally Posted by audreyh1 So you would rather see Medicare premiums raised across the board than only for the top 25% in annual income?

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?

[Bikerdude]

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Originally Posted by REWahoo Further, that % increases each year, beginning at 3.7% at age 71 and gradually increasing to a whopping 52.6% at age 115.

I'll buy the beer for you to cry in on your 115th.

[audreyh1]

Quote:

Originally Posted by bondi688 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]

Quote:

Originally Posted by 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.

That's interesting - they pay 80% now:

Quote:

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]

Quote:

Originally Posted by 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.

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

ha

[ERhoosier]

Quote:

Originally Posted by audreyh1 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]

Quote:

Originally Posted by ERhoosier 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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by JakeBrake ........ 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.