Passing the Cut Inflation Act would mean Democrats would cut Medicare prescription drug benefits for seniors before the midterms.
The Senate passed the Democrats’ $700 billion inflation cut bill on Sunday, setting a vote later this week for the House to pass the bill and make the deal into law.
However, the legislation contains strict left-wing price controls that would radically alter benefits for older people.
The Inflation Reduction Act would overhaul Medicare Part D, a federal program administered by private insurance companies to provide retail prescription drug coverage to Medicare beneficiaries. Before Medicare Part D, tens of thousands of Medicare beneficiaries received little help with retail drug costs.
However, in an effort by Democrats to reduce prescription drug prices, they slipped price controls into Medicare Part D of the Inflation Reduction Act.
The legislation would amend Medicare Part D by:
- Capping the cost of Part D prescription drugs by creating a cap of $2,000 on annual disbursements
- Reduces beneficiary coinsurance and would increase plan and manufacturer liability by 2025
- Premium growth is capped at 6% per year
- Extend the income threshold for the program’s low-income subsidy to 150 from 135% of the federal poverty level
- Require Part D plans to spread out-of-pocket expenses for beneficiaries over the plan year
Overall, the Democrats’ Medicare Part D overhaul could likely result in reduced additional benefits for Medicare Part D beneficiaries or US seniors.
Democrats suffered a blow on Saturday, when Senate Congresswoman Elizabeth MacDonough ruled that the Cut Inflation Act provision requiring drug companies to give discounts for their products sold to private insurers exceeded inflation and violated Senate reconciliation rules. This would have served as a cushion for the redesign of Medicare Part D under the Inflation Reduction Act.
This could cause patients with private insurance to pay higher costs for prescription drugs by “dissuading” pharmaceuticals from keeping prices lower.
This lost provision would have eliminated $288 billion in savings that Democrats hoped to create under the Inflation Reduction Act.
While Senate Majority Leader Chuck Schumer (D-NY) lamented the loss of the rebate program, he hailed the bill as a stepping stone to tackle “Big Pharma.”
“This is a major victory for the American people,” Schumer explained. “While there was an unfortunate decision that inflation reimbursement has a more limited scope, the overall program remains intact and we are about to finally take on Big Pharma and reduce Rx drug prices for millions of Americans.”
After voting against the Cut Inflation Act on Sunday, Sen. Rick Scott (R-FL) criticized Democrats for, among other things, cutting Medicare for the elderly:
After helping Joe Biden plunge America into a recession and create the highest inflation in 40 years, Senate Democrats have just doubled down on their attacks by targeting the elderly, job creators and all families. Americans. With their new frenzy of taxation and reckless spending, Democrats have launched a WAR ON SENIORS and a WAR ON AMERICAN JOBS that raises taxes and will mean far fewer lifesaving drugs. Worse yet, with an oversized IRS that just got $80 BILLION more in its budget to hire 87,000 more officers, Joe Biden’s feds are coming after every penny you have with more audits. The Democrats’ radical socialist agenda of bigger government and higher taxes is not working. The only thing that will result will be MORE SPENDING, MORE TAXES AND MORE INFLATION. Democrats are destroying our country, killing pensions and crushing the American dream for millions, but they don’t care. [Emphasis added]
He added, “This is a sad day for the country, but I will never stop fighting for Florida families and ending Joe Biden’s failed agenda.”
Ike Brannon, former senior economic adviser to the late Sen. Orrin Hatch (R-UT) and former senior adviser for tax policy at the Treasury Department, said in a statement:
You don’t have to be an economist to know that the drug provisions in the reconciliation bill will increase premiums for the elderly and increase costs for everyone in commercial health insurance markets. . Giving the government the ability to negotiate the price of certain medicines will not change this reality – and it will undoubtedly limit consumer access to certain life-saving medicines.
Brannon said, “If lawmakers want affordability without disrupting consumer access, they should encourage more competition in the marketplace. That’s what pharmacy benefit managers do.
Sean Moran is a congressional reporter for Breitbart News. Follow him on Twitter @SeanMoran3.