CEPR - Center for Economic and Policy Research


En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press What Income Level Does the NYT Consider "Affluent?"

What Income Level Does the NYT Consider "Affluent?"

Sunday, 10 March 2013 19:56

A NYT piece discussing the prospects of another budget deal would have benefited enormously by answering this question. The piece referred to a proposal to restructure Medicare under which the government, "could potentially charge the affluent elderly more."

The definition of "affluent" matters enormously. When it came to raising taxes, President Obama and the Republican leadership agreed not to raise taxes for couples earning less than $450,000 a year. If this same definition of "affluent" is applied to elderly then it would only affect 0.1-0.2 percent of Medicare beneficiaries.

While the rich have a hugely disproportionate share of the country's income, their per person Medicare expenses are roughly the same as everyone else's. (Actually they would be somewhat less since the premiums for the program are already means tested.) This means that if President Obama and congressional leaders are planning to apply a cutoff for being affluent for Medicare that is comparable to what was used in the tax negotiations then the amount of money at stake is trivial and it is hardly worth the paper's time to be reporting on the negotiations.

Alternatively, if the proposal is intended to raise a serious amount of revenue then it will likely mean that seniors with incomes around $50,000-$60,000 would be paying more for their Medicare. This is not a level of income that is generally regarded as "affluent." If this is the sort of cutoff being considered in the negotiations then the NYT is badly misleading its readers by saying that they are discussing charging fees to the affluent elderly. In this case they are talking about charging higher fees to people who almost everyone would consider middle income.

Comments (8)Add Comment
(Actually they would be somewhat less since the premiums for the program are already means tested.)
written by coberly, March 10, 2013 8:51
not sure i understand this. if the premiums are means tested, i would expect "the rich" to be paying more.

on the other hand the rich DO pay more for Medicare. maybe too much more for the program to be politically sustainable.

at least for the near future it would be better if the Medicare tax was "flat", capped, and sufficient to pay ALL expected medical costs after retirement. this would be an increase in the tax for workers, but it would liberate them from the hidden taxes they pay (that is the part of their income tax that goes to Medicare, and the part of their wages, and the prices they pay for things, that goes to the share "the rich" pay.

there is nothing wrong with the people paying for their own medical insurance with some adjustment for "ability to pay." then when the people see what it costs they may demand something be done about the prices.

in any case it is stupid to "cut Medicare" and leave retired people scrambling to pay for something they could have paid relatively painlessly "as we go" out of their paycheck while they were working. it is probably also stupid to expect "the rich" to pay for everyone's medical care.
minimum wage "fix" to medicare?
written by coberly, March 10, 2013 8:58
i would try to raise the minimum wage to a true "living wage" where living includes paying for medical care both "now" and "when you retire," as well as putting enough aside for a decent retirement.

but while we are fighting that battle, we really need to consider raising our own taxes the tiny amount that would be needed for SS "forever" and for Medicare "for the near future."
Zombie ideas
written by Jennifer, March 10, 2013 9:12
It's so irritating that they cannot leave Medicare alone, and what ideas they have are stupid. There were some people who thought a victory had been won when the "fiscal cliff" deal did not include raising the Medicare age. Among actual health policy experts it's understood that for a variety of reasons raising the Medicare age actual costs more, as does putting people in private plans (instead of Medicare). This is a nice paper by serious people.

Ok one more try for the link.
written by Jennifer, March 10, 2013 9:20

I suppose it's not worth the technical effort it would take, but it would be great to be able to edit your own entries.
It's What We Said It's
written by James, March 10, 2013 9:21
Even with the election victory, working folks continue to lose the battles and war.

The influential and .01% have shaped and framed the debates in their favor for so long. People think this will only affect the factory workers; actually, lowering the mean test to $50K affect much of the professionals.
Jennifer's paper link
written by David, March 10, 2013 10:37
I think this is the paper Jennifer had trouble giving the link to (I've had similar problems from my 'smart' phone)

written by skeptonomist, March 11, 2013 9:13
If full health care is to be extended to everyone regardless of income it probably does mean that an increased tax burden will fall on people at or not far above median income (assuming the debt is not allowed to expand indefinitely). Unless the tax rates on the highest income levels and corporations are increased to WW-II levels, or the income distribution is radically changed, there is nowhere else to get the money. If health-care costs continue to rise as they had been doing, the same would be required to keep Medicare going at full coverage.
What is Affluent?
written by scottinnj, March 11, 2013 6:27
According to this HHS study, to be in the top 25% of households for > 65 yrs old your household income needed to essentially be higher than 75k. If one considers the top quartile as affluent it isn't a whole lot higher than the 50-60k quoted in the post.


Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.


Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.