Health and Human Services (HHS) Secretary Kathleen Sebelius, center, accompanied by Centers for Medicare and Medicaid Services Acting Administrator Marilyn Tavenner, left, and Food and Drug Administration (FDA) Commissioner Margaret Hamburg, speaks during a news conference at the HHS in Washington, Wednesday, April 10, 2013, to discuss President Barack Obama's fiscal 2014 for the Health Department. (AP Photo/Manuel Balce Ceneta)
WASHINGTON (AP) -- The Obama administration has revealed that its plan to increase Medicare premiums for upper-income seniors would create five new income brackets to squeeze more revenue for the government from the top tiers of retirees.
First details of the plan emerged today after Health and Human Services Secretary Kathleen Sebelius testified to Congress on the president's budget which was released two days earlier. The budget included only a vague description of a controversial proposal that has grown more ambitious since Obama last floated it.
"Means testing" has been part of Medicare since the George W. Bush administration, but ramping it up is bound to stir controversy. Republicans are intrigued, but most Democrats don't like the idea.
The plan itself is complicated. The bottom line is not: more money for the government.
Obama's new budget calls for raising $50 billion over 10 years by increasing monthly "income-related" premiums for outpatient and prescription drug coverage. The comparable number last year was $28 billion over the decade.
Currently, single beneficiaries making more than $85,000 a year and couples earning more than $170,000 pay higher premiums. Obama's plan would raise the premiums themselves and also freeze adjustments for inflation until 1 in 4 Medicare recipients were paying the higher charges. Right now, the higher monthly charges hit only about 1 in 20 Medicare recipients.
WASHINGTON (AP) -- Feeling pretty comfortable in retirement?
Here's something to think about: President Barack Obama's budget would raise Medicare premiums for individual retirees making more than $85,000 and couples making more than $170,000.
It would also freeze the indexing for inflation of those income thresholds, so eventually 1 in 4 retirees will have to pay more. Right now only about 1 in 20 pays the higher rate.
The higher premiums surprised a retired city worker from Albuquerque, Sheila Pugach.
She says she's paying about $500 a year more in premiums for Medicare outpatient and drug coverage, all because required withdrawals from her retirement savings bumped her into a higher income bracket.
Republicans like Obama's idea, so Pugach could soon have more company.
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