The Biden-Harris administration and congressional Democrats touted the so-called “Inflation Reduction Act” (IRA) to seniors to lower inflation and health care costs. However, it has proven to accomplish the exact opposite, and now it’s up to lawmakers on Capitol Hill who wisely opposed the law in 2022 to address its failures and help end the raid on our nation’s seniors.
Nearly two years after its passage, the IRA has diverted nearly $260 billion from the projected Medicare “savings” to pay for special interest handouts like large tax credits for costly electric vehicles, enormous subsidies paid to big health insurer-PBM corporations, and funding health care programs for illegal immigrants.
The sleight-of-hand funding issues with the IRA are far from the only problems it creates for Medicare enrollees. The government intervention and bureaucratic mandates the IRA imposed on Part D—the Medicare program that covers prescription drugs—has caused a steep rise in prices for private sector Part D policies.
In the past, Part D relied on normal market forces resulting from fair market competition between insurers to keep drug prices in check. As government price fixing upends that system, insurers are either raising premiums or abandoning the market. Older Americans are already seeing premiums for standalone Part D plans skyrocket by 20% or more, and the number of available plans they can choose from has declined to a record low, putting two million seniors at risk of losing their current Part D plans.
Just recently, the Centers for Medicare & Medicaid Services (CMS) reported the Part D base beneficiary premium costs—which increased by a staggering 179%—and arbitrarily added a new “demo” to limit premium increases in standalone Part D plans, which roughly eleven million seniors are enrolled in. In the Biden-Harris code, this means that the administration will further subsidize big insurers to the tune of $72 billion over the next three years via the new “demo” project from the Medicare Trust Funds, further eroding the program’s financial security. That way, seniors will only see a $2 increase per month on average. All told, that puts the entire IRA raid on Medicare at well over $330 billion.
The Biden-Harris administration is not protecting Medicare; they’re stealing from it.
Furthermore, the IRA’s interference in Medicare drug pricing has also resulted in aggressive insurer-imposed prior authorizations and potential new access restrictions to critical treatments, increasingly threatening seniors’ quality of care. American pharmaceutical manufacturers lead the world in the development of new drugs and several of these companies have already announced reductions in R&D investments out of the understandable fear that price controls will make it impossible for them to justify the expense. It’s predicted that the effects of the IRA will slash innovation and cause as much as a 30% drop in annual new drug approvals, including the small-molecule drugs that make up the vast majority of pharmaceutical treatments.
There are far better free-market solutions to lower healthcare costs that put patients, families, and older Americans first – not liberal politicians and corporate special interests. To address the failures of the Biden-Harris IRA, Congress should immediately recall funds that the spending bill diverted from Medicare and implement changes to reduce premiums, prohibit insurer-PBM corporations from pocketing big drug pricing rebates, and prevent access restrictions to critical treatments.
Ron Fitzwater, CAE, MBA – is the Chief Executive Officer of the Missouri Pharmacy Association,
CAE, MBA – is the Chief Executive Officer of the Missouri Pharmacy Association,
