Plan would raise Medicare drug fees for some seniors

The Bush administration is advancing a proposal to charge higher premiums and deductibles on the Medicare prescription drug benefit to seniors whose annual incomes exceed about $80,000, administration officials said Thursday.

The administration is working with Sen. John Ensign (R-Nev.) to attach a “means testing” provision to upcoming legislation. The provision would save the government billions -- but similar past proposals have been blocked by furious seniors.

“You say it saves money and these people can afford it, but it also eats away at the incomes of seniors. It erodes their sense of the reliability on these federal programs, and it certainly erodes political support,” said John Rother, policy director for AARP, the powerful senior lobby.

The plan was originally drafted as part of President Bush’s fiscal 2008 budget, but it died this spring with little notice. Now, at Ensign’s request, the Centers for Medicare and Medicaid Services, which administers the federal health plan for the elderly, has revived the measure.

The timing of the effort could not be worse, some Republicans said. Bush’s approval ratings are at record lows, his war policies are criticized, and his veto this week of a children’s health insurance bill has drawn fresh fire.

Ensign put a similar proposal to a Senate vote in March. It was rejected, 44 to 52.

But Ensign, who leads the campaign committee responsible for electing Republicans to the Senate, vows to add means testing to any Senate Medicare measure. “Working couples with incomes over $160,000 should not be subsidized by retired firefighters or schoolteachers,” he said. “They should pay more of their share.”

The section of Medicare that pays for outpatient care, including doctors’ fees, already imposes some means testing. Single seniors with incomes exceeding $82,000 and couples with incomes above $164,000 pay higher premiums on a sliding scale as their wealth rises. Those thresholds rise each year with inflation.

The original Bush proposal would have frozen those thresholds at $82,000 and $164,000, so more seniors would have been affected by means testing over time. The same thresholds would have applied to the new prescription drug benefit.

The new plan is likely to maintain inflation adjustments, Ensign said. But the senator was adamant that means testing be added to the drug benefit, and he said he had secured a strong White House commitment.

The proposal will have the support of some budget hawks from both parties, who say a response to a looming crisis in entitlements must come before the heart of the baby boom begins drawing Medicare and Social Security benefits.