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There’s not a day that goes by that there’s not some news story about Obamacare or Medicare or the costly health care system. I’ve decided to throw my two cents in and talk only about Medicare and how to help save the very beneficial program for seniors.

Most people don’t pay a Part A premium because they paid a rather small Medicare tax (1.45%) while working, and this same amount is paid by the employer. The first part of my proposal is to increase the Medicare tax to 1.60% for all individuals earning over $75,000 per year. For an individual that earns $100,000 per year, the current Medicare
tax would be $1,450 per year. My proposal would increase that by $150 per year, or less than $3.00 per week. The employer would also be responsible for a similar amount.

With this slight increase that would affect approximately 37% of the working population, it would increase the Medicare coffers by approximately $890 million per year.

The second part of my proposal has to do with Medicare deductibles. According to CBS Money Watch, Medicare Part B premiums went up $3.50, to $99.90 per month in 2012. The Medicare Trustees report had previously projected an increase of $10.20, to $106.60 for 2012.

CBS Money Watch reported that “Premiums have not increased for retirees since 2009, thanks to a ‘hold-harmless’ provision – since there were no cost of living increases in the Social Security income benefit for 2010 and 2011, Medicare premiums could not rise without effectively reducing seniors’ Social Security income. Typically, Medicare Part B premiums are deducted from Social Security income checks.

“The premium for new retirees in 2011 was $115.40; this group of retirees now pays the standard premium of $99.90 per month, for a reduction of $15.50 in their monthly premium. New and prior retirees will receive a net increase in their Social Security check, given the recently announced cost-of-living increase (COLA) for 2012 of 3.6%. The 2012 COLA will increase Social Security monthly checks by an average of $43 per month, more than offsetting the modest Part B premium increase for prior retirees.

“The good news didn’t stop there – the Medicare Part B deductible actually decreased by $22, from $162 last year to $140 for 2012. The deductible for Part A hospital coverage increased from $1,132 in 2011 to $1,156 in 2012, a lower-than-expected increase, below increases in prior years, and below the rate of inflation. This comes on top of news that premiums for Medicare’s Part D, the prescription drug program, would decline ever so slightly, too.”

My proposal for Medicare Parts A, B and D deductibles is a little more complicated than the increase in Medicare Part A payroll taxes. For seniors with incomes of $25,000 or less, I propose reducing the deductible by 40% to 50%. For seniors with incomes of $25,000 to $50,000, the deductible would remain the same. For seniors with incomes of $50,000 to $100,000, the deductible would increase by the cost of living, even if there’s not a COLA for Social Security. For seniors with incomes greater than $100,000, the deductible would increase by 10%.

With these adjustments, the lower income seniors would probably no longer have to debate about seeing the doctor or having food on the table. For the higher income seniors, the modest increases in deductible would only mean a shorter cruise on their next vacation. For the Medicare trust fund, it would only mean an extra $100 million per year.

My final recommendation is for the primary care physicians to receive a greater fee from Medicare, and the specialists receive a greater fee directly from the seniors with incomes greater than $100,000.

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