New Bill Links Firearm Tax to Medicare: $200 Fee Reinstated to Fund $1.7 Billion Boost for Part A

The “Medicare Investment and Gun Violence Prevention Act” is a bill that pairs two major policy areas—firearm regulation and healthcare funding—into one piece of legislation. In short, it attempts to shore up Medicare’s hospital fund using revenue generated by reinstating federal excise taxes on certain firearms. Specifically, the bill appropriates $1.7 billion in new, additional funding from the U.S. Treasury directly to the Medicare Part A Hospital Insurance Trust Fund for fiscal year 2026 (SEC. 3).

The Cost of Transferring

The mechanism for this funding boost comes from Section 2, which reinstates federal taxes on the transfer and manufacture of certain firearms, effective 90 days after the bill becomes law. This isn't a new tax, but a repeal of a prior elimination, essentially bringing back a fee structure. For most regulated firearms, the bill amends the Internal Revenue Code to levy a $200 tax on each transfer and each manufacture of that firearm. If you’re buying or selling a firearm that falls under this category, that $200 fee hits you at the point of transfer. If you’re a manufacturer, that $200 hits every time you make one.

Who Pays What: The Firearms Math

This tax structure creates immediate, tangible costs for anyone involved in the regulated firearm market. Say you’re a small, independent gunsmith who custom-makes regulated firearms; every item you produce now carries a $200 federal tax liability before it even leaves your shop. If you’re a consumer looking to purchase one of these regulated items, you’re looking at an extra $200 tacked onto the price tag due to the transfer tax. The bill does make a distinction for firearms classified as “any other weapon” (under section 5845(e)), setting the tax rate for their transfer much lower, at just $5.

The Medicare Payday

On the funding side, the bill is a clear win for Medicare Part A, which covers essential services like hospital stays and skilled nursing care. The $1.7 billion is a direct, dedicated infusion of cash into the Trust Fund (SEC. 3). For the millions of seniors and disabled individuals relying on Medicare, this appropriation offers a significant, if temporary, boost to the fund’s solvency. The money is appropriated directly from the U.S. Treasury, meaning it’s guaranteed to be available until it is spent, providing immediate financial relief and stability to the hospital insurance program.