In fact, President Bush does propose phasing out Medicare in his new budget, if the NYT got its facts right. According to this article, President Bush proposes to change the rules on the means-testing of Medicare benefits, so that the income current cutoffs of $80,000 for individuals and $160,000 for couples are not indexed. This means that over time, more and more of the senior population would have to pay premiums that largely cover the cost of their Medicare. In other words, Medicare will no longer be government provided health care for most of the elderly population. How fast will the benefits phase out? Well in roughly twenty years, the means-testing would be hitting singles who are the same point in the income distribution as someone earning $40,000 a year today, and couples earning $80,000. In forty years, the point at which Social Security is first projected to face a shortfall, the means-testing would be hitting singles who are at the same point in the income distribution as someone earning $20,000 a year today, and couples earning $40,000. In other words, under President Bush's proposal many middle income elderly people would face the loss of their Medicare subsidy before Social Security faces any funding shortfall. A bit further out, and only the poor would still recieve any subsidy through the Medicare program. After Social Security, Medicare is the country's largest social program. When a president proposes phasing it out, it should be big news. Why aren't the reporters covering it?
--Dean Baker
