To the editor:
This letter is in response to the editorial of March 18 titled "U.S. health plans can't escape the budget ax." The editorial contained a suggestion that the ceiling on the amount of wages subject to Medicare tax should be abolished. I am submitting for your consideration current information regarding this issue.Total abolishment of a ceiling has not been done. However, Section 1131 of the Omnibus Budget Reconciliation Act of 1990 contained a provision to drastically increase the amount of wages subject to Medicare tax to $125,000.
Additionally, the Medicare wage base for years after 1991 will be indexed to increases in the average wages in the economy. This is the first time that the amount of wages taxed for Medicare has differed from the amount of wages taxes for Old Age, Survivors and Disability Insurance (OASDI). The OASDI taxable wage base for 1991 is $53,400.
Steve L. Jollensten
Department of Health and Human Services