• Means testing Medicare – but in another universe

    I was reading my Wonkbook this morning (courtesy of Ezra Klein), and I came across this piece by Brian Beutler:

    In a Q&A session with one of the event’s moderators — Wall Street billionare-turned-deficit-scold Pete Peterson — Boehner said wealthy beneficiaries should pay for their Medicare premiums.

    “Pete, I love you to death, but I don’t think the taxpayers ought to be paying your Medicare premium,” Boehner said. “And under Paul Ryan’s plan, what it says is, let’s allow the American people to decide which health care plan fits their needs. And if you’re middle-income, lower income, we are going to pay, just like we do today, for the cost of those premiums. But for people of means, there’s no reason why we should subsidize Pete Peterson’s premium. I’m sorry. He ought to pay the full cost of his premium to be in Medicare.”

    Don’t get me wrong; means testing Medicare (and Social Security) are avenues of reform that have been thrown around for a number of years. Right now, both programs are available and nearly identical for everyone, regardless of wealth. Bill Gates may not need his Social Security when he hits 65, but he can get it, just like everyone else. There’s an argument to be made that there are people who don’t need the same level of support for Medicare and Social Security as others, and reducing their benefits could save money.

    What makes this odd, however, is that this is not the Medicare reform that exists in Rep. Ryan’s plan, or any plan put forward this year.  None.

    Pete Peterson turns 85 in June, and has been receiving Medicare benefits for a long time. Pete Peterson is also worth at least a billion dollars. So I’m not worried that if we told Peter Peterson to pay for his own Medicare, he’d be fine. There’s just one problem with Rep. Boehner’s answer: Rep. Ryan’s plan specifically says that is will not affect anyone over the age of 55 today. Therefore, even if the Republican plan passed tomorrow into law, we would all be paying the full costs of Pete Peterson’s premiums now and in the future. I’m not sure what universe Rep. Boeher is referring to when he says that we won’t be on the hook for Pete Peterson’s full Medicare.

    The second strange thing in Rep. Boehner’s answer is this:

    And if you’re middle-income, lower income, we are going to pay, just like we do today, for the cost of those premiums.

    That’s not what The Republican-passed plan does. Rep. Ryan’s plan specifically does not pay, just like we do today. Rep. Ryan’s plan gives you money to pay for a portion of those premiums, and it’s going to be less and less of those premiums every year. That’s where the savings comes from in his budget.

    Trying to cut money from Medicare for those at the high end of the economic spectrum, while leaving the rest of Medicare intact, may be politically concerning for some, but it’s undoubtedly a compromise position for Republicans at this moment, and it’s something I would be interested in seeing analyzed and debated. Unfortunately, it’s not the proposal being put forth by Republicans right now, so I’m not sure what Rep. Boehner is talking about.

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    • This is a little off topic but I cannot resist saying that as far as SS goes, you do not need to means test, as a fist step just equalize the pay out. Currently those who earned more get more. I understand that they also paid in more but the program is not a retirement plan it is social insurance a welfaer program. As currently structured it is a stupid retirement program and very stupid welfare program.

    • Seems to me like the point is that we won’t pay the full premium for future Pete Petersons, so this is needlessly pedantic. Far be it from me to be a John boehner defender, but I’m pretty sure he knows that Ryan’s plan has a delayed implementation and he’s simply using Peterson as an example.