Everybody wants to keep Medicare’s finances stable. However, it is difficult to get consensus on how to proceed, particularly given the imbalance of power in Washington.
In response to Medicare’s new authority under the Inflation Reduction Act to negotiate prescription costs, several pharmaceutical companies have now brought legal action against the Department of Health and Human Services.
Balancing Medicare Program Improvement
Independent analysts have raised concerns about the program’s ability to provide full payments in the future.
Here are three actions that decision-makers can take right away to improve the program and make sure that it can keep providing care for Americans who rely on it.
First, repeal the prescription price caps included in the Inflation Reduction Act (IRA) from the previous year.
The left has prioritized allowing Medicare to bargain over the cost of prescription medications for years.
In his State of the Union address in February, President Biden boasted about the achievement for a full 25 lines, describing it as a victory for taxpayers and patients.
The truth is very different. According to projections by the Congressional Budget Office (CBO), the IRA will reduce prescription spending by $281 billion over the following eight years.
However, as my research for the University of Chicago demonstrates, the bill will have a chilling impact on the development of new drugs, and the ensuing blow to innovation would result in health losses of at least $18 trillion.
Read more: Medicare Advantage Plans Face Potential Excesses Of Over $75 Billion In 2023
Saving Healthcare Expenditures
In general, the development of new drugs reduces other types of spending more than any additional expenses brought on by new products.
For instance, Hepatitis C medications replace liver transplants, antidepressants are less expensive than psychologists, and statins reduce the need for heart surgery.
The move follows the imposition of a requirement last year linking Medicare coverage to involvement in acceptable clinical trials, which are frequently challenging to access.
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