Even Greg Mankiw apparently did not realize a point I made in a post last month: “while Medicare coverage is nearly universal among people age 65 and older and all beneficiaries are eligible for the same services, high-income beneficiaries already pay much more for those benefits.”
Citing House Speaker John Boehner’s statement that we “consider means-testing Medicare,” Mankiw outlined the option of raising Medicare premiums for higher-income seniors.
But, as I explained, upper-income people already pay higher premiums for Medicare’s Supplementary Medical Insurance (or SMI, the part that pays doctor bills) and the Medicare prescription drug benefit than other beneficiaries do. High-income taxpayers also pay more for Medicare’s Hospital Insurance (HI).
Policymakers may still want to raise Medicare premiums further for upper-income people to strengthen the program’s long-term finances. But, in considering such a step, they need to understand that Medicare is already means-tested.