Should Medicare Benefits Be Taxed?
Congress’s Joint Committee on Taxation…calculates the taxes that ought to be levied on Medicare benefits in excess of taxes and premiums paid. This year, the tax expenditure for the hospitalization portion of Medicare is $34 billion, $26.4 billion for Medicare Part B and $6.6 billion for Medicare Part D, which provides prescription drugs. That is a total tax benefit to Medicare beneficiaries of $67 billion in 2013. (More from Bruce Bartlett)
“Additionally, starting this year, those with incomes above $200,000 ($250,000 for couples) pay an additional Medicare tax of 0.9 percent.”
Disincentivizing hard work and earning a decent wage?
“While I do not expect that the taxation of Medicare benefits will be on the table when Congress considers tax reform, it might be one way of raising revenue from high-income taxpayers who would be the primary beneficiaries of lower tax rates.”
Bottom line, they’re taking our money, one way or another.
Would it not be like paying for a good or service?
“In reality, almost everyone gets back far more in Medicare benefits than they ever pay into the system.”
Which is most certainly not ok.
Absolutely not. Taxes will be sure to go up.
How very unfortunate that we will have to experience this.
Yes, it seems as if we are going bankrupt quicker than ever
This doesn’t seem logical? Someone has to be paying the bills. Those bills add up quick when you think about all of the dollars gone to waste from the countless inefficiencies.
Medicare should become a high-deductible plan with seniors having the ability to put funds tax free in an HSA-type account.
Absolutely.
From the linked Times article Bartlett asserts “In reality, almost everyone gets back far more in Medicare benefits than they ever pay into the system.”
So what?
Individual contributions account for only about 12% of the Medicare premiums. Given this relationship, it is not possible for the individuals’ contributions to exceed the value of the benefits they receive.
This is not different from private group insurance in which most plan sponsors contribute the large majority of the premiums.
What does Bartlett accomplish by his assertion? I think his intent is to suggest that seniors are getting some sort of precious benefit at scandalously low prices – when in fact Medicare is high-cost, lousy insurance coverage that in all its insufficiency is nevertheless exactly what the Congress, in its wisdom, designed.
Fundamentally, I think Bartlett is asking the public to believe the Medicare hot dog is really a wholesome, valuable meal and seniors don’t pay nearly enough for it.
And I think Bartlett takes this tack because he lacks the courage to come right out and call for a direct reduction in Medicare benefits.
Instead, he’s trying to accomplish the benefit reduction by sneaking it in via a back-door tax.
Nice try – but we see you, Bartlett.
That’s one big tax benefit…