Op-Ed by the President: My Plan to Extend Medicare for Another Generation

New York Times: Joe Biden: My Plan to Extend Medicare for Another Generation
[President Joe Biden, 3/7/23]

Millions of Americans work their whole life, paying into Medicare with every working day — starting with their first job as teenagers. Medicare is more than a government program. It’s the rock-solid guarantee that Americans have counted on to be there for them when they retire.

For decades, I’ve listened to my Republican friends claim that the only way to be serious about preserving Medicare is to cut benefits, including by making it a voucher program worth less and less every year. Some have threatened our economy unless I agree to benefit cuts.

Only in Washington can people claim that they are saving something by destroying it.

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 two biggest health reform bills since the creation of Medicare, both of which will save Medicare hundreds of billions over the decades to come, were signed by President Barack Obama and me.

The Affordable Care Act embraced smart reforms to make our health care system more efficient while improving Medicare coverage for seniors. The Inflation Reduction Act ended the absurd ban on Medicare negotiating lower drug prices, required drug companies to pay rebates to Medicare if they increase prices faster than inflation and capped seniors’ total prescription drug costs — saving seniors up to thousands of dollars a year. These negotiations, combined with the law’s rebates for excessive price hikes, will reduce the deficit by $159 billion.

We have seen a significant slowdown in the growth of health care spending since the Affordable Care Act was passed. In the decade after the A.C.A., Medicare actually spent about $1 trillion less than the nonpartisan Congressional Budget Office projected before the A.C.A. reforms were in place. In 2009, before the A.C.A., the Medicare trustees projected that Medicare’s trust fund would be exhausted in 2017; their latest projection is 2028. But we should do better than that and extend Medicare’s solvency beyond 2050.

So first, let’s build on that progress. My budget will build on drug price reforms by strengthening Medicare’s newly established negotiation power, allowing Medicare to negotiate prices for more drugs and bringing drugs into negotiation sooner after they launch. That’s another $200 billion in deficit reduction. 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.

Second, let’s ask the wealthiest to pay just a little bit more of their fair share, to strengthen Medicare for everyone over the long term. My budget proposes to increase the Medicare tax rate on earned and unearned income above $400,000 to 5 percent from 3.8 percent. As I proposed in the past, my budget will also ensure that the tax that supports Medicare can’t be avoided altogether. This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come. My budget will make sure the money goes directly into the Medicare trust fund, protecting taxpayers’ investment and the future of the program.

When Medicare was passed, the wealthiest 1 percent of Americans didn’t have more than five times the wealth of the bottom 50 percent combined, and it only makes sense that some adjustments be made to reflect that reality today.
Let’s ask them to pay their fair share so that the millions of workers who helped them build that wealth can retire with dignity and the Medicare they paid into. Republican plans that protect billionaires from a penny more in taxes — but won’t protect a retired firefighter’s hard-earned Medicare benefits — are just detached from the reality that hardworking families live with every day.

Add all that up, and my budget will extend the Medicare trust fund for more than another generation, an additional 25 years or more of solvency — beyond 2050. These are common-sense changes that I’m confident an overwhelming majority of Americans support.

MAGA Republicans have a different view. They want to repeal the Inflation Reduction Act. That means they want to take away the power we just gave to Medicare to negotiate for lower prescription drug prices. Get rid of the $35 per month cap for insulin we just got for people on Medicare. And remove the current $2,000 total annual cap for seniors.

If the 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. That’s not how we extend Medicare’s life for another generation or grow the economy.

This week, I’ll show Americans my full budget vision to invest in America, lower costs, grow the economy and not raise taxes on anyone making under $400,000. I urge my Republican friends in Congress to do the same — and show the American people what they value.