"Pay More If Your Annual Salary Is 500 Million Won" US Targets the Wealthy Amid Health Insurance Deficit

Annual Income of $400,000 or More
Tax Rate to Increase from 3.5% to 5% for the Wealthy

U.S. President Joe Biden is pushing for tax increases on high-income earners to strengthen the finances of Medicare, a public health insurance program primarily for those aged 65 and older.

According to a report by Yonhap News on the 7th (local time), the White House announced that President Biden's fiscal year 2024 budget proposal includes raising the Medicare tax rate from the current 3.8% to 5% for individuals earning more than $400,000 annually (approximately 520 million KRW).

President Biden of the United States speaking at the Democratic Party House members' workshop
[Photo by AP and Yonhap News]

Under the Affordable Care Act (ACA), also known as the "Obamacare" law enacted in 2010 when Biden was vice president, a 3.8% Net Investment Income Tax (NIIT) has been imposed since 2013 on some high-income earners to secure Medicare funding. The new proposal would increase the tax rate to 5% for individuals earning over $400,000.

The White House explained that since the introduction of Medicare, the wealth gap has widened, and this tax increase would help maintain Medicare's financial balance for at least another 25 years.

According to the Associated Press, the primary beneficiaries of Medicare are seniors aged 65 and older. More than 65 million Americans benefit from the Medicare program, which receives about $900 billion (approximately 1,175 trillion KRW) in tax funding annually.

With an aging population, the number of Medicare enrollees is expected to continue rising. However, as the fund faces depletion, without any measures, benefits will inevitably have to be reduced starting in 2028.

Republican Opposition Makes Congressional Approval Challenging

U.S. President Joe Biden is pushing for tax increases on high-income earners to strengthen the finances of Medicare, a public health insurance program for those aged 65 and older.
[Photo by AFP·Yonhap News]

Foreign media, including the Associated Press, have noted that the Republican Party, which generally opposes tax increases on the wealthy and currently controls the House of Representatives, makes it unlikely that President Biden's Medicare plan will easily pass Congress.

The proposal also includes strengthening Medicare's authority to negotiate drug prices with pharmaceutical companies and channeling the savings from price reductions back into the Medicare fund. The full budget, including the Medicare section, is scheduled to be released on the 9th.

In an op-ed for The New York Times on the same day, President Biden stated, "The budget I am unveiling this week will maintain Medicare's financial balance beyond 2050 without cutting any Medicare benefits."

He urged, "Let's ask the wealthy to pay just a little more so that they can contribute their fair share and we can strengthen Medicare for everyone in the long term."

He warned, "If the MAGA Republicans (Donald Trump's campaign slogan 'Make America Great Again') get their way, seniors will have to pay more out of pocket for prescription drugs and insulin, the deficit will grow larger, and Medicare will weaken."

This content was produced with the assistance of AI translation services.