On March 9, 2023, President Biden released his Fiscal Year 2024 Proposed Budget, which addresses the need to extend Medicare solvency. As further explained in an HHS press release, the proposed budget seeks to extend the Medicare Hospital Insurance (HI) Trust Fund’s solvency by at least 25 years without cutting benefits by directing all revenues from the net investment income tax to the HI Trust Fund, increasing the Medicare tax rate on income above $400,000, closing loopholes in existing Medicare taxes, and crediting savings from prescription drug reforms to the HI Trust Fund. The American Hospital Association has reported that the proposed budget will aid the HI Trust Fund, which currently has sufficient funds to pay full benefits until 2028 based on the most recent Medicare Trustees Report.
The proposed budget also seeks to strengthen Medicare’s negotiation power to negotiate lower prices for drugs and bolster the requirement that drug companies pay rebates to Medicare when they increase prices faster than inflation.
The Congressional Budget Office will analyze these estimated savings before Congress considers the proposals.