President Joe Biden wants to raise taxes to boost funding for Medicare and plans to negotiate lower costs for prescription drugs, according to advance details of his budget proposal being released later this week. want to expand capacity.
The Democratic president outlined his plan in a guest essay in The New York Times on Tuesday, writing that “Medicare is more than a government program. It is the rock-solid guarantee that Americans can count on to be there when they retire.”
Biden is scheduled to release his budget proposal on Thursday in Philadelphia. Moving the proposal through Congress would be difficult, with Republicans in control of the House and Democrats with only a slim majority in the Senate.
The Medicare tax rate would increase from 3.8% to 5% on income over $400,000 a year, including wages and capital gains.
“This modest increase in Medicare contributions from the highest earners will help keep the Medicare program strong for decades to come,” Biden writes in the Times.
The plan also aims to have the White House close a loophole that allows some income to avoid Medicare taxes.
In addition to taxes, Biden wants to expand Medicare’s ability to negotiate drug costs, which began with the Inflation Reduction Act. He signed the sweeping legislation last year.
The changes would help shore up a major trust fund that pays for Medicare, which provides health care for older adults. According to the White House, the changes will keep the fund solvent until 2050, about 25 years longer than currently expected.
Further changes will be made to Medicare benefits. Biden wants to limit cost sharing to just $2 for some generic drugs. The idea would be to reduce out-of-pocket expenditure for the treatment of high blood pressure, high cholesterol, and other diseases.
In addition, the budget would eliminate cost-sharing for up to three mental health or behavioral health visits per year.