There were many ingredients in the Republican election landslide of 2010. Perhaps the most important is that by looting $787 billion from Medicare to pay for Obamacare, the Democrats gave the “Medicare cuts” club that they had used to beat Republicans for decades to their opponents, who then hammered them.
Remarkably, 12 years later, Democrats may, in a last ditch attempt to salvage something from the wreckage of Build Back Better, repeat the exact same mistake.
This time the conceit is that they can drain $200 billion or more from Medicare prescription drug spending and somehow politically sell it to the elderly by calling it ‘prescription drug pricing reform’. drugs,” and then use that money to buy political support through more generous grants from Obamacare.
The Democrats’ plan would impose price controls through so-called negotiation in which the government would dictate the prices Medicare pays for drugs to manufacturers, who would face a 95% tax on their total sales if they refused. An “offer you can’t refuse”.
Proponents claim it’s a free lunch, that seniors will have access to the same drugs at significantly lower prices. Reality does not work that way.
Imposing price controls to siphon off hundreds of billions of dollars from Medicare prescription drug spending will clearly result in few new cures and treatments being available for the elderly. An analysis of an earlier version of the Democratic price control plan by University of Chicago researchers found that it would result in 167 to 324 fewer drugs being developed over the next two decades, research spending and biopharmaceutical development being reduced by more than a trillion dollars. .
Meanwhile, the health insurance industry has feasted on bigger-than-ever Obamacare grants that have been rolled into Biden’s $1.9 trillion “COVID relief” bill. The idea of increasing grants when applications were at historic lows as people avoided seeking treatment during the pandemic never made sense, but Biden did it anyway.
Now the big insurance companies are in the midst of a lobbying campaign to get the subsidies extended, saying it’s the only way to avoid big premium increases – even if the use of the healthcare system is still below 2019 levels as many people are reluctant to return to doctors and hospitals.
As in 2010, the insurance industry relies on AARP — which earns more than $1 billion a year in corporate royalties, mostly from UnitedHealth — to carry out its public relations and lobbying . The plan, clearly, is to drain drug spending money from Medicare and funnel it into insurance companies.
The Democrats’ bet would be that lowering prices through “bargaining” is an easier message to explain in a campaign context than “price controls cause shortages.” Maybe. But the Republican message could be much simpler than that. As simple as: “my opponent voted to drain hundreds of billions of Medicare dollars to spend on Obamacare”.
We’ve seen that one before. The result? Republican landslide.
Copyright 2022 Phil Kerpen, distributed by Cagle Cartoons Newspaper Syndicate. Phil Kerpen is the president of American Commitment and the author of “Democracy Denied”. Kerpen can be contacted at [email protected]