March 7, 2023
White House Previews FY 2024 Budget, Includes Proposals to Expand IRA Drug Negotiation Program
On March 7, the White House released a fact sheet previewing proposals in the President’s forthcoming FY2024 budget aimed at extending the solvency of the Medicare program.
The fact sheet lists the following proposals:
- Expanding the drug negotiation program in the Inflation Reduction Act to allow Medicare to negotiate prices for more drugs and bring drugs into negotiation sooner after they launch;
- Extending the prescription drug inflation rebate to the commercial market;
- Capping Part D cost-sharing on certain generic drugs used to treat chronic conditions to $2 per prescription per month;
- Increasing the Medicare net investment income tax (NIIT) on incomes above $400,000 from 3.8 percent to 5 percent; and
- Closing loopholes in existing Medicare taxes and dedicating NIIT revenues to the Medicare Hospital Insurance (HI) Trust Fund.
According to the Medicare Office of the Chief Actuary, the proposals in the President’s Budget would extend the solvency of the Medicare HI Trust Fund by at least 25 years, into the 2050s. The prescription drug pricing reforms are projected to save $200 billion over 10 years.
While the fact sheet is light on specifics, more detail may be provided in the President’s Budget, which is expected to be released this Thursday.
As a reminder, the President’s budget is largely a messaging activity to highlight policy areas of interest for the Administration and would require additional regulations or legislation before being enacted. To read the fact sheet, CLICK HERE.