Question A:
If it is implemented, the proposed increase in the tax rate on earned and business income above $400,000 in the Biden budget, along with other proposed changes to Medicare, would extend the solvency of the Medicare program for the next 25 years.
Responses
Responses weighted by each expert's confidence
Question B:
If it is implemented, the proposed reform of Medicare drug negotiations in the Biden budget is likely to lead to a substantial reduction in drug prices for beneficiaries.
Responses
Responses weighted by each expert's confidence
Question C:
If it is implemented, the proposed reform of Medicare drug negotiations in the Biden budget is likely to lead to a substantial reduction in the development of beneficial new drugs.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Money is fungible--hard to say that this particular tax is the source of revenue that will "save Medicare," which draws on the entire fiscal purse. Anyway, it's hard (at least for me) to guess how much more funding Medicare needs to survive in its current form.
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 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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 Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Robert Hall |
Stanford | Bio/Vote History | ||
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There is only one budget constraint, that of the fed gov. It is meaningless to talk about the solvency of a federal program.
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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Depends on follow-up actions
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Yes, but the taxes will reduce economic efficiency.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Does not solve structural problems. And will reduce long-term growth.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Definitely would improve solvency, but a lot hinges on how fast health care costs grow.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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25 years is a long time to predict anything
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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Administrations usually make over-optimistic long-term predictions. Mainly for that reason, I am skeptical of this prediction.
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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One would need to look more carefully at the details to be sure, but it looks as if the proposed funding increases would suffice.
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 José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Not enough information.
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Biden's revenue expectations are optimistic, as are his expectations of government savings from pharmaceutical price negotiations.
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 James Stock |
Harvard | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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I read this question as asking whether it will *help* solvency, which it will. Solve is a big word.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Also have to deal with Medicare advantage
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Question B Participant Responses
Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Composition of pharma innovation is highly responsive to profits. This may lead to excessive investment in expensive drugs for end-of-life care. Lower profit margins across the board may not have huge effects on overall R&D, and may even lead to better composition of R&D.
-see background information here -see background information here |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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The incentives around drug development are so distorted that it's hard to say. Reducing profits will reduce R&D, but whether these would have been "beneficial new drugs" is much less certain.
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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The make plenty already.
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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The concept is that if pharma firms can't anticipate large markups on marginal cost per unit, then they won't commit large amounts of capital to high-risk multi-year R&D. That's a reasonable guess, but I'm not confident enough in this topic to click 'Agree.'
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Robert Hall |
Stanford | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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The market is much bigger than just Medicare.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Will reduce incentive to invest in new drugs, but substantial depends on how much price reduction. Also, possible that drug discovery improves with technology.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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Economic logic suggests that capping drug prices will induce less drug discovery. But whether this effect will be "substantial" is hard to predict.
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Drugs research will remain lucrative, and so the dire projections of the drug industry may not come to pass.
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José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Not enough information to have an opinion on "substantial".
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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James Stock |
Harvard | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Same problem. I dont' know the scope. Pharma came up big on Covid without a huge profit incentive but that will not always be the case.
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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