Preserving the Promise of Medicare

Washington, D.C. – Today, U.S. Representative Lloyd Doggett (D-TX), Chair of the House Ways and Means Health Subcommittee, joined by colleagues, introduced new legislation to preserve health care coverage for seniors and individuals with disabilities:The Assuring Medicare’s Promise Act (AMP Act). As this bill was being circulated for cosponsors, new press reports have indicated that the Senate may close the loophole that allows wealthy individuals to avoid paying the Net Investment Income Tax(NIIT) and direct these funds into the Medicare Hospital Insurance Fund.This is positive progress, but only extends Medicare solvency by about three years.

In addition to closing these same loopholes, the AMP Act redirects the current NIIT to where it was originally intended – the Medicare Trust Fund – a move which doesn’t raise anyone’s taxes but that does assure an additional seven years of Medicare solvency. Amid these negotiations and following the Medicare Trustees’ recent estimate that action must be taken before 2028 to preserve the solvency of the Medicare Hospital Insurance Fund, Rep. Doggett filed the AMP Act to protect Medicare’s promise of comprehensive health care and extend Trust Fund solvency into 2040.

“The creation of Medicare represented a pledge to every American of access to quality, affordable health care during their senior years or in the event of disability,” said Congressman Doggett. “To assure we keep this promise, I am offering a clear way to assure greater tax fairness, prevent disruption of benefits, and provide sufficient time to implement other cost-saving measures. While some Republicans would cut benefits or just wring their hands, we need a real plan. As stewards of the Medicare program and representatives of tens of millions of beneficiaries, Congress has a responsibility to protect the fiscal health of Medicare so that patient health is not at risk.”

The Assuring Medicare’s Promise Act would:

• Close the loophole in the Net Investment Income Tax (NIIT) that allows wealthy business owners to avoid paying their fair tax share to fund health care. 
  • The bill ensures high-income owners of pass-through businesses have to pay either the 3.8% Medicare employment tax or the 3.8% Net Investment Income Tax. 
  • This provision was included in the House-approved Build Back Better Act, though the revenue was not proposed for allocation to Medicare.
• Redirect revenue generated from the Net Investment Income Tax (NIIT) to the Medicare Hospital Insurance Fund.
• Together, closing the loophole and redirecting NIIT revenue is expected to generate $650 billion and extend Medicare solvency for at least a decade.

“The justifiably acute concern for the future solvency of the Medicare Trust Fund calls for common sense, immediate solutions that do not impose additional financial burdens on beneficiaries,” said Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare. “The Assuring Medicare’s Promise Act meets both requirements by claiming misdirected tax revenue from the Treasury back to the Medicare Trust Fund. This bill also passes the fairness test by ensuring that wealthy business owners and owners of investment income can no longer avoid paying the 3.8% Medicare tax to fund health care. Implementing these strategies is predicted to extend the Medicare Trust Fund’s solvency from 2028 to 2040 and should receive full Congressional support without hesitation.” 

Alex Lawson, Executive Director of Social Security Works, stated: "Due to loopholes in the law, the wealthy aren't paying their fair share into Medicare. The Assuring Medicare’s Promise Act closes these loopholes so that we can expand Medicare and keep it strong for decades to come. Social Security Works is proud to endorse this long-overdue legislation, which will give Medicare beneficiaries much needed peace of mind about the future of their earned benefits.”

The Assuring Medicare’s Promise Act is endorsed by the National Committee to Preserve Social Security and Medicare, the Center for Medicare Advocacy, and Social Security Works.

The legislation is cosponsored by Reps. Barragán (D-CA), Blumenauer (D-OR), Butterfield (D-NC), Cohen (D-TN), Jayapal (D-WA), EB Johnson (D-TX), Kind (D-WI), Larson (D-CT), Moore (D-WI), Newman (D-IL), Pocan (D-WI), Schakowsky (D-IL), Sewell (D-AL), Suozzi (D-NY), and Titus (D-NV).

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