March 13, 2006
Jemarion Jones
(202) 639-6405

National Social Security Council Warns Public of Proposal to Hike Medicare Premiums for 2007

(WASHINGTON)—The American Federation of Government Employees’ (AFGE) National Social Security Council today warned the public of a plan by the Social Security Administration (SSA) to raise billions of dollars by increasing monthly premiums for Medicare Part B enrollees. Early estimates show that the proposal, published recently in the Federal Register, will raise nearly $8 billion in revenue from 2007 to 2011.

The increase will be phased in from 2007 to 2009 and is intended to provide part of the funding for the Bush administration’s Medicare prescription drug program. AFGE calculates that more than two million Americans will pay higher premiums in 2007.

“This is a huge tax increase that will impact millions of Americans who rely on Medicare,” says Witold Skwierczynski, president of AFGE’s National Social Security Council. “SSA should be open about this proposal and educate the public about it, rather than sneak it in through bureaucratic maneuvers. A review of the SSA Web site shows that the agency hasn’t posted any information about a premium increase that will affect millions of Medicare recipients. Additionally, the agency hasn’t made any announcement about the issuance of the new regulations.”

SSA’s proposal refers to the premium increase as a decrease in Medicare Part B premium subsidies. “Such bureaucratic mumbo jumbo masks the fact that effective January 2007, Medicare beneficiaries who earn $80,000 or more will be faced with a huge tax increase,” says Skwierczynski. He also adds that affected Medicare recipients won’t be notified about the increases until December, conveniently after the November midterm elections.

The proposed increases would begin in January 2007 and coincide with a wave of baby boomer retirements. Skwierczynski says that the most puzzling aspect of the proposal is that SSA will rely on old income records to determine how much of an increase a person must pay. Additionally, under the SSA plan, Medicare Part B monthly premiums will increase anywhere from 35 percent and to 80 percent.

“The effect will be that many Americans likely will pay more in Medicare premiums than if their income level were evaluated at the time of Medicare eligibility,” says Skwierczynski.

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