The Honorable Robert Corker
185 Dirksen Senate Office Building
Washington DC, 20515

Dear Senator Corker,

You recently introduced a new bill aimed at deficit reduction, in part taking aim at ‘entitlement reform’. On the subject of Medicare, you stated:

“Medicare means-testing would allow Medicare payments to be reduced for people who can afford to pay for their own healthcare.”

I’m curious as to the income levels where you would consider people to be so wealthy that they do not need Medicare or at least should receive less assistance from the government in paying for it? As you know, Congress just had a serious debate on this issue with President Obama on taxes and decided that $400,000 was the appropriate cutoff for who is considered wealthy. If Congress were to set a comparable income level as a cutoff for Medicare, the savings will be too small to even be noticed in budget projections. Even if the cutoff for a means test was set at half this level, or $200,000, it would only affect 1 percent of beneficiaries, and therefore could at least lead to a reduction of Medicare costs of 1 percent in the extreme case that people at this income level were thrown off Medicare completely. In order to raise any substantial amount of money through a means test of Medicare you would have to set the cutoff for some reduction in benefits in the $50,000-$60,000 income range.  

I would be happy to work through calculations of potential savings from means-testing with you if that would be helpful. In any case, I hope that you clarify your plans for means-testing Medicare. I suspect that people in Tennessee and around the country would be very interested.

Dean Baker, Co-Director, Center for Economic and Policy Research