Beginning in January, retirees with an individual annual income of $80,000 ($160,000 per couple) or more will see their monthly Medicare Part B premium jump significantly. Retirees with incomes under $80,000 will pay $93.50 per month for Part B coverage, which accounts for 25% of the total cost of the Medicare benefit.

Retirees, with annual incomes range from $80,000 to $100,000, will pay $113.30 a month. The premiums then jump to $133.30 for incomes from $100,000 to $150,000; $153.30 a month for those with incomes $150,000 to $200,000; and $173.30 a month for anyone with an individual income above $200,000.

“Even though the vast majority of public retirees are not close to these income levels and will not be impacted, we are concerned with the precedent this is setting,” explained Association President Ralph White. “It is easy to say that affluent people should pay more, but it is a dangerous road to turn down. Medicare has never been means tested in its entire forty-one year history.”

Congress passed and President Bush signed the means testing provision into law as part of the Medicare reform act of 2003, which also ushered in the new Medicare Part D prescription drug plans. With all the attention paid to Medicare D, the “income relating” or means testing scale went largely unnoticed.

The Congressional Budget Office estimates that some 2.3 million retirees will be affected across the country. According to federal estimates, the new premium structure will save $13 billion over ten years or just three tenths of one percent of what Medicare will expend during that period.