Editorial: Paying a premium

Tuesday, Sept. 12, 2006 | 7:24 a.m.

Starting next year Medicare beneficiaries with higher incomes will have to pay higher monthly premiums, raising concerns that many eventually will leave the taxpayer-subsidized program and seek private health insurance.

The surcharge will be applied to individuals with annual incomes of more than $80,000 and married couples with incomes of more than $160,000. For individuals who bring in more than $200,000 annually, monthly Medicare premiums are expected to quadruple by 2009, The New York Times recently reported.

The sliding surcharge is intended to help offset the ever-rising costs of Medicare, which federal officials say cannot be sustained under its current funding plan. The surcharge was included in the 2003 law that established the Part B prescription drug plan.

But while the Bush administration was grandstanding for Plan B and federal agencies were offering information on how to sign up, they failed to emphasize that those who earn more might have to pay more for what is supposed to be a universal program of health insurance for Americans over a certain age. A former Social Security Administration official told the Times that the surcharge "will come as a shock to many people because they have not received any warning."

If higher premiums force the upper class to obtain private insurance, Medicare could begin to look more like welfare. And that imperils the program for everyone. Social programs serving only those with lower and middle-class incomes often are more politically palatable to cut than those that serve all economic levels. Such cuts would hit middle-class seniors the hardest, while those who qualify for Medicaid would still be covered as would wealthy Americans who could afford private insurance.

Income-based premiums are not the basis for a social insurance program, as Medicare is designed to be. American workers must pay into it and, therefore, all are entitled to its benefits. While we must find a way to make Medicare financially sustainable, pricing the upper class out of the system and creating problems for the future middle class shouldn't be part of the solution.