President Biden will seek to raise the Medicare tax on high earners and push for more drug price negotiations to help keep the federal health insurance program solvent through at least 2050 as part of his budget proposal this week, the White House said.
“What the president is outlining in his budget is calling on Congress to make a couple of key changes to extend the life of the Medicare program for future generations,” said Chiquita Brooks-Lasure, Head of the Centers for Medicare and Medicaid Services.
Brooks-Lasure indicated that the President would fund the Medicare extension in three ways.
“We all, when we’re working, pay a portion of our income for the Medicare program and he’s asking high income families, people who earn over $400,000 a year to pay a little bit more. Right now they pay 3.8% of their income and he’s raising it to 5%, that is one way. He’s also closing a couple of the loopholes in the tax code that will extend the Medicare program and finally wants to expand on the authority that Congress has given us to negotiate prescription drugs to expand that authority to more drugs and put those dollars in extending the life of Medicare,” she said.
The biggest change that the proposal would make is to ensure Medicare is available for future generations. Biden is also focused on the people who depend on the program to usher in lower costs.
“With the Inflation Reduction Act that passed last year, the president was able to negotiate with Congress to put in some important changes to Medicare drug benefits so now there is a $35 cap on a one month supply of insulin when you get it from the pharmacy, vaccines are free, including the shingles vaccine and importantly drug costs will go down.
Because we are negotiating, he wants to continue to build on that for more drugs at a lower out of pocket cost. We’re proposing that we cover more behavioral health and mental health services in Medicare,” said Brooks-Lasure.
Medicare covers approximately 64 million people in the U.S. If no action is taken, the most recent Medicare Trustees Report projects that the trust fund would be insolvent in 2028.
The president is scheduled to unveil his budget plan on Thursday, March 9.