When new income-based premiums for Medicare's Part B program go into effect next month, some seniors will get an unwelcome surprise: Their monthly costs will be going up considerably more than expected because of the government's method of counting their income.
In addition to income from investments, pensions and wages, seniors will find that big but unusual windfalls -- from house sales, for instance, or from taking cash from an individual retirement account -- will also be included in government calculations.
As a result, an advocacy group for seniors says, tens of thousands of people will be counted as wealthy even though their continuing yearly income is modest. Some will be paying as much as $800 more a year for Part B coverage because they are deemed to be "higher income beneficiaries." This will be on top of the $93.50 a month standard premium that all recipients will pay.
"We are concerned that our members are just now finding out that the government is suddenly increasing seniors' Part B premiums without adequate warning," Shannon Benton, executive director of the Senior Citizens League, said in a statement. [Emphasis added]
That wealthier social security recipients have to pay more for Medicare may not strike most of us as terribly unfair, but because of the way the law has been drafted, those who dipped into their IRA accounts in 2005 got hit twice: they paid taxes on those funds and now they're paying again, this time in increased premiums. Chances are that those same folks were not aware of the consequences when they made their decision.
And why weren't they aware? Probably for this reason:
Means testing was included in the bill by a Republican-dominated Senate-House conference committee, although neither body had included the provision in its bill.
In other words, that part of the bill had not gone through the usual legislative process: committee hearings, floor debates, a house vote. It was simply sneaked into the bill during the final phase of the process.
Hopefully the new Democratic leadership will stop this method of legislating. We all will benefit from a more transparent legislative process.