Senate Rejects Year’s Delay in Medicare Surtax

WASHINGTON —  The Senate on Wednesday narrowly beat back an effort to delay for one year the surtax to be paid by the elderly to cover the costs of Medicare’s new coverage of catastrophic health care costs.

By a vote of 51 to 49, the Senate instead adopted a resolution calling on the Finance Committee to study whether to scale back the controversial surtax.

The surtax took effect with income earned in 1989, although the elderly will not have to pay it until they file their 1989 tax returns early next year. The surtax is 15% of the income tax bill of persons 65 and older who pay income taxes, up to a maximum surtax of $800 per elderly taxpayer.

The amendment to delay the surtax would also postpone by one year the new Medicare benefits that have not already taken effect.

The new law already provides full Medicare coverage of hospital stays after beneficiaries pay $564 for the first day. In future years, it will cover prescription drug costs and limit total payments by the elderly for physicians’ services.

Republican Sens. John McCain of Arizona and Orrin G. Hatch of Utah, the prime sponsors of the amendment to delay the surtax by a year, insisted that the burden on the elderly was excessive.

Senate Republican leader Bob Dole of Kansas responded: “You can’t keep passing programs without paying for them.”

A coalition of senior citizens groups and labor unions had urged instead an income tax increase for the wealthiest 1% of the general population.