President Joe Biden on Tuesday introduced a plan to boost Medicare funding by raising taxes on the wealthy and expanding the government program’s ability to negotiate lower prescription drug prices.
Biden’s plan would increase the Medicare tax rate on Americans earning above $400,000 from 3.8% to 5%, a move that the White House estimates would help keep Medicare’s funds solvent into the 2050s. His plan would also close loopholes in existing Medicare taxes to ensure that it applies to investment income and capital gains. No one earning less than $400,000 a year would pay a dime more in taxes, under Biden’s plan.
“The budget I am releasing this week will make the Medicare trust fund solvent beyond 2050 without cutting a penny in benefits. In fact, we can get better value, making sure Americans receive better care for the money they pay into Medicare,” the president wrote in a New York Times op-ed. “When Medicare was passed, the wealthiest 1% of Americans didn’t have more than five times the wealth of the bottom 50% combined, and it only makes sense that some adjustments be made to reflect that reality today.”
The president’s proposal also includes a measure that would give his administration the authority to negotiate the prices of more prescription drugs under Medicare. Currently, Medicare is allowed to negotiate the prices of a handful of covered drugs, thanks to the Inflation Reduction Act, which was signed into law last year.
“That’s another $200 billion in deficit reduction,” Biden wrote. “We will then take those savings and put them directly into the Medicare trust fund. Lowering drug prices while extending Medicare’s solvency sure makes a lot more sense than cutting benefits.”
The president wrote that these are “common sense changes” that he’s confident an “overwhelming majority” of Americans will support.
In his op-ed, Biden also criticized “MAGA Republicans” for their various proposals to cut everything from health insurance to food assistance benefits, an effort that would plunge millions more Americans into extreme poverty.
In his piece, Biden wrote that if MAGA Republicans “get their way, seniors will pay higher out-of-pocket costs on prescription drugs and insulin, the deficit will be bigger, and Medicare will be weaker.”
“The only winner under their plan will be Big Pharma,” the president wrote. “That’s not how we extend Medicare’s life for another generation or grow the economy.”
At the end of his piece, Biden urged Republicans and Congress to “show the American people what they value.”
Biden is expected to release his full budget plan on Thursday.
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