MEANS TESTING PROPOSED FOR MEDICARE PRESCRIPTION DRUG PLAN
   October 12, 2007

The Bush Administration and Sen. John Ensign (R-NV) are proposing a means-test for the Medicare prescription drug benefit, increasing premiums and deductibles on beneficiaries with higher incomes, according to The Washington Post. Originally part of President Bush's FY2008 budget and rejected 52 to 44 by the Senate in March as a similar proposal, the measure has been brought up again at Sen. Ensign's request. The plan calls for higher payments for individuals with incomes exceeding $82,000 and couples making more than $164,000, but does not allow for an annual inflation adjustment of the
threshold. This move guarantees more and more beneficiaries would be hit with higher payments over time, with the plan costing seniors $3.2 billion the first five years alone. Ensign has promised to add means-testing to any Medicare bill that comes before the Senate and his proposal is likely to be heard by the Finance Committee, of which he is a member, within weeks. 

This would certainly affect more well-off retirees. Yet economists are saying that without this, or some other substantial adjustment, the future of prescription drug aid for seniors cannot be sustained as boomers flood the rolls.