President Joe Biden has unveiled his plan to increase taxes in order to fund Medicare and expand its ability to negotiate lower costs for prescription drugs. In a guest essay published in The New York Times on Tuesday, Biden emphasized the importance of Medicare as a "rock-solid guarantee" for Americans during retirement. The budget proposal is set to be released on Thursday in Philadelphia, but pushing it through Congress may be difficult given the current political landscape.
Under the plan, the Medicare tax rate would increase from 3.8% to 5% on income exceeding $400,000 per year, including salaries and capital gains. The goal is to keep the Medicare program strong for decades to come by closing loopholes that allow some income to avoid Medicare taxes. The changes are also intended to help shore up a key trust fund that pays for Medicare.
The plan also includes expanding Medicare's ability to negotiate drug costs, which began with the Inflation Reduction Act signed by Biden last year. According to the White House, these changes will keep the fund solvent until the 2050s, approximately 25 years longer than currently expected.
Biden's budget proposal would also make additional changes to Medicare benefits, including limiting cost sharing for some generic drugs to only $2. This would lower out-of-pocket costs for treating hypertension, high cholesterol, and other ailments. Additionally, the budget would end cost-sharing for up to three mental health or behavioural health visits per year.
The proposal to increase taxes to fund Medicare and expand its benefits is likely to face opposition from Republicans in control of the House and Democrats with only a slim majority in the Senate. However, Biden argues that a modest increase in Medicare contributions from those with the highest incomes is necessary to ensure the program's sustainability.
Medicare has long been a source of debate in American politics, with both Democrats and Republicans proposing various reforms to the program over the years. While Medicare provides essential healthcare coverage for millions of Americans, its funding has been a point of concern, particularly as the population ages and healthcare costs continue to rise.
Biden's proposal to increase taxes on high earners to fund Medicare and expand its benefits is part of his broader effort to build a more equitable society. The president has emphasized the importance of addressing income inequality and providing support for those who need it most, particularly during the COVID-19 pandemic.
In his essay in The New York Times, Biden notes that "Medicare is more than a government program. It's a promise." With his budget proposal, the president is working to ensure that Medicare remains a strong and reliable promise for generations to come.
