(WASHINGTON) -- President Joe Biden is out Tuesday with a new plan he says will shore up Medicare’s finances through 2050 by increasing taxes on the wealthy and allowing more negotiation on prescription drug prices.
The plan, unveiled by Biden in a New York Times op-ed on Tuesday, is part of the White House’s overall budget proposal set to be released later this week as a battle brews on Capitol Hill over the debt ceiling.
Lawmakers have until September at the latest to reach an agreement or risk an unprecedented default that could wreak havoc on the economy. Republicans have said they won't raise the debt ceiling without cuts to federal spending, while Democrats have advocated for a clean increase to fulfill the nation's obligations.
Amid the showdown, Biden's sought a stark contrast between his administration and the Republican Party when it comes to Medicare and Social Security. He’s accused some in the GOP of gunning for the popular programs, though House Speaker Kevin McCarthy's said they are off the table in the upcoming negotiations, and has vowed to strengthen the programs as they face financial shortfalls.
To keep Medicare solvent, Biden's new plan would increase the Medicare tax rate 5% -- up from 3.8% -- on Americans making more than $400,000 per year.
He's also proposed allowing Medicare to negotiate the prices of more prescription drugs and investing the savings reaped back into the program. Currently, Medicare is allowed to negotiate only the prices of a small share of covered drugs as outlined in the Inflation Reduction Act passed by Democrats last year.
According to a White House fact sheet, the Medicare proposal will also cap generic drug cost sharing at $2 for medications used to treat chronic illnesses like hypertension or high cholesterol.
"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," Biden wrote in the New York Times op-ed. "These are common-sense changes that I’m confident an overwhelming majority of Americans support."
"MAGA Republicans have a different view," Biden continued, taking aim at Republican criticisms of the Inflation Reduction Act. "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."
Millions of seniors depend on Medicare for health insurance but the program faces a funding shortfall that could see benefits cut starting in 2028 unless action is taken by Congress.
"Drugs make up about 27% of fee-for-service Medicare spending for beneficiaries who are enrolled in prescription drug benefits, so it should not be surprising that doing more to reduce the prices would help to extend solvency until 2050," Stacie Dusetzina, a health policy professor at Vanderbilt University Medical Center, said of Biden's new plan.
"Will that be enough? Maybe not, but it could help. Medicare is facing substantial spending growth due to the aging population and their health needs, which means we need to do more than minor adjustments if we want to keep the program solvent," Dusetzina told ABC News in an email.
It remains to be seen how Biden's budget will address Social Security, which also faces a funding shortfall that could result in scheduled benefits being cut by 23% starting in 2034.
"When I introduce my budget, you’ll see that it’s going to invest in America, lower health costs, and protect and strengthen Social Security and Medicare while cutting the deficit more than $2 trillion over the next 10 years," Biden said as he spoke on health care in Virginia Beach last week.
Biden is scheduled to unveil his broader budget plan in Philadelphia on Thursday.
The GOP has yet to reveal exactly what they want to see cut in the next budget and have not detailed a timeline for their budget plan to be unveiled. Rep. James Comer told This Week last month they in the process of debating their proposal.
"Somebody's got to be the adult at the table, and House Republicans will hopefully be that," Comer said.
ABC News' Sarah Kolinovsky contributed to this report.
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