President Joe Biden wants to increase taxes to boost funding for Medicare and expand the program’s ability to negotiate lower costs for prescription drugs, according to advance details of his budget proposal being released later this week.
President Joe Biden on Tuesday proposed new taxes on the rich to help fund Medicare, saying the plan would help to extend the insurance program’s solvency by 25 years and provide a degree of middle-class stability to millions of older adults.
In his plan, Biden is overtly declaring that the wealthy ought to shoulder a heavier tax burden. His budget would draw a direct line between those new taxes and the popular health insurance program for people older than 65, essentially asking those who’ve fared best in the economy to subsidize the rest of the population.
Biden wants to increase the Medicare tax rate from 3.8% to 5% on income exceeding $400,000 per year, including salaries and capital gains. The White House did not provide specific cost-saving estimates with the proposal, but the move would likely increase tax revenues by more than $117 billion over 10 years, according to prior estimates in February by the Tax Policy Center.
“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden wrote in a Tuesday essay in The New York Times. He called Medicare a “rock-solid guarantee that Americans have counted on to be there for them when they retire.”
More than 65 million people rely on the program that costs taxpayers roughly $900 billion every year. The number of Medicare enrollees is expected to continue growing as the U.S. population ages. But funding for the program is a problem with federal officials warning that, without cuts or tax increases, the Medicare fund might only be able to pay for 90% of benefits by 2028.
Biden’s suggested Medicare changes are part of a fuller budget proposal that he plans to release on Thursday in Philadelphia.
