In my my previous post I said a little about Ed Dolan's idea of making healthcare deductibles higher for higher income people. This is not the case for Medicare now. Everybody on Medicare faces the same dollar amount. Dolan's idea is novel, and I believe it's worth considering.
Suppose poor Pete and rich Rich both have Medicare. Pete's income is $30,000, he has more debt than savings, and Rich's is $300,000 with substantial savings and no debt. Each is in the hospital for several days for an operation. This results in a $200,000 bill for each. Medicare will pay the same for each, about $200,000 - $1,364 (Part A deductible) = $198,636. (This is simplified, which should be obvious if you have seen a hospital bill or one for outpatient surgery.) Pete might have a Medigap policy to cover the $1,364. Else, it is probably a significant expense to him. Whether Rich has a Medigap policy or not, he could easily afford the $1,364.
One may argue the Medicare law treats both equally, but that is only in terms of dollars. On the other hand, one may argue the Medicare law treats them unequally in terms of percent of income or wealth. One may argue that Rich is entitled to as much or more from Medicare because he paid far more in payroll taxes over his working lifetime than Pete did. I have no incontestable answer to what is equitable here, i.e. how much Medicare ought to pay. Anyway, it seems that Medicare paying less on behalf of Rich is not an unreasonable opinion. How much less is very debatable. If it were much less, let's assume that Rich had the opportunity to purchase a Medigap policy with a lower deductible to recognize his higher Medicare deductible if he wished to buy insurance for the extra risk.
One may argue that using income to calculate how much Medicare pays adds an administrative burden on Medicare. That is true, but Medicare already does that for Part B and Part D premiums.
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