Obama Plan Would Hike Premiums for Wealthier Medicare Recipients

President Barack Obama's proposed 2014 budget would raise $50 billion over 10 years by increasing monthly premiums for wealthier Medicare recipients and tweaking the sliding scale on which the premiums are calculated, according to details released on Friday by the agency that runs Medicare and Medicaid.

Currently, individual Medicare beneficiaries who make more than $85,000, but less than $107,000 pay a 35 percent premium for their outpatient and prescription drug benefits over the standard monthly Medicare rate.

According to the Centers for Medicare and Medicaid Services, that percentage would rise to 50 percent for individuals making more than $107,000, but not more than $160,000, and rise to 65 percent for people making more than $160,000, but not more than $214,000. For people making more than $214,000 the premium increase is 80 percent.

Under the new budget proposal, the number of brackets would rise starting in 2017 to nine from four, with the lowest premium increasing to 40 percent from 35 percent and the highest to 90 percent from 80 percent. It would also lower the top tier income level to $196,000 from $214,000.

By adding the new brackets, people who make more than $92,333 would no longer pay 35 percent, but 46.5 percent, while people who make more than $99,667, but less than $107,000, would pay 53 percent, up from 35 percent.

Similarly, those who currently pay a 50 percent premium would pay anywhere from 59.5 percent to 72.5 percent, while those who currently pay 65 percent would pay either 79 percent or 85.5 percent. Those making more than 196,000 would pay an additional 90 percent. (Reporting By Toni Clarke in Washington. Editing by Andre Grenon)

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