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6 Reasons Joseph Stiglitz and Other Top Economists Think Means-Testing Medicare & Social Security Is a Destructive Idea

Means-testing is a back-door strategy for taking away benefits earned by hard-working Americans.

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5. Creeping Means-Testing Is Already Happening

Medicare already has some means-tested features and politicians have gradually added more, including income-tested premiums. Medicare was started in 1965 to provide health insurance to people 65 and older regardless of their medical history or income. Since then, 75 percent of the program’s Supplementary Medical Insurance (SMI), the part that goes to pay doctors, has been financed by general revenues, the largest chunk of which comes from personal income taxes. The personal income tax is progressive, which means that upper-income people pay a larger share of their income in taxes for SMI.

Since 2007, specific means-testing features have been added. For example, beneficiaries with incomes over $85,000 have been required to pay higher SMI premiums. Beginning in 2013, the 2.9 percent hospital insurance tax will continue to apply to the first $200,000 of income for individuals or $250,000 for couples filing jointly, but it will rise to 3.9 percent on income in excess of those amounts.

Means-testing tends to erode political support for programs, which is why conservatives will continue to push these incremental changes. We’ve gone far enough in this direction already and there is no good reason to continue – other than giving greedy one percenters and financiers exactly what they want.

6. The Coming Old Age Crisis

How exactly are you going to survive in retirement? Do you have a pension? Do you have a secure job? Is the stock market paying great returns on your investments?

In her book, When I'm Sixty-Four: The Plot against Pensions and the Plan to Save Them, economist Teresa Ghilarducci has sounded an alarm about the crisis looming for Baby Boomers and anyone else who hopes to retire down the road.

The United States is a rich country, and a dignified retirement for our elderly should be one of our proudest achievements. And yet Social Security and Medicare are under near-constant attack. Pensions are vanishing, and despite 401(k)s and other voluntary retirement plans, workers still can’t save nearly enough to retire securely. Ghilarducci warns that the economic structure of retirement in America is falling apart. She exposes the Wall Street financiers who want to privatize Social Security, the risk of 401(k) plans, do-it-yourself retirement schemes, and companies like Enron that have left employees high and dry.

The financial stability of Americans is further shaken by rising medical costs. A single-payer system would be the most sensible way to address this crisis, and Medicare is the closest thing we have now to single-payer. Means-testing would harm seniors who already have paltry incomes. Proposals to increase premiums for 25 percent of beneficiaries, for example, could hit American seniors who make as little as $47,000, according to the nonpartisan Kaiser Family Foundation.

Congress can do many things to help the economy recover from a Wall Street-driven financial disaster and to address income inequality, like asking the one percent to pay their fair share in taxes. But we must come together as Americans to expose the subterfuges and lies and reject any proposals that harm Social Security and Medicare, including means-testing.

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture." She received her Ph.D. in English and cultural theory from NYU. She is the director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.