Most older Americans–make that “most Americans who are paying attention”–know that this country doesn’t have a healthcare system. As a former student put it, we have a healthcare industry. And we pay through the nose for it. A superficial google search will turn up mountains of data confirming the fact that healthcare costs in the United States vastly exceed those of other advanced countries, while giving us a “system” that ranks somewhere between 35th and 37th in the world.
I encountered the data that really made me aware of the insanity of market-driven healtcare several years ago, when I served on a committee organized by a medical-school friend. At the time, seventy percent of all healthcare costs were paid by governments at the local, state and federal levels. Not just Medicare and Medicaid, but through various other programs, and especially through the obligations of government-as-employer of teachers, police and fire personnel, etc. etc.
What really made an impression on me was data showing that those payments by government would be sufficient to pay for all medical care in a national system that eliminated health insurers’ marketing costs, claims processing, overhead and profit.
I’m a big fan of markets in areas where they work. Healthcare isn’t one of those areas. You don’t go “shopping” or comparing prices when you’re having a heart attack.
The Affordable Care Act was a good first step in delivering healthcare to Americans who’d been priced out of the market. It also gave added freedom to those whose medical issues had locked them into their jobs, thanks our insistence on tying coverage to employment. Drug costs, however, remained far higher than in other countries, thanks to the lobbying clout of “big Pharma,” despite the fact that the federal government is the major funder of research and development.
Reducing those costs is among the many under-appreciated accomplishments of the Biden Administration. As the Washington Post reported, “Monumental changes to prescription drug prices for seniors are coming.”
Thanks to the Inflation Reduction Act, one of President Biden’s signature achievements, prescription drugs are set to become substantially more affordable for seniors. Yet many Americans seem unaware of just how monumental these changes will be.
The article listed “six things to look for.” The first of those included eye-popping savings for both individual Americans and the government.
For the first time in history, Medicare can now negotiate directly with manufacturers. For the initial round of negotiations, the Centers for Medicare and Medicaid Services chose 10 drugs that treat common health conditions, including cardiovascular disease, cancer and rheumatoid arthritis.
Each of these medications costs consumers in the United States three to eight times what people pay in other countries. In 2022, Medicare paid an eye-popping $46.4 billion for them. The impact to consumers is equally staggering. As CMS Administrator Chiquita Brooks-LaSure told me, “Some of these drugs are thousands of dollars per year for people who depend on them to live.”
It will take some time for negotiated prices to take effect. Assuming the federal government prevails in the lawsuits filed by pharmaceutical companies, CMS expects lower prices to be in place in 2026.
But that’s only the beginning. Fifteen more drugs will be selected for 2027 and then 20 per year from 2029 and thereafter. The lower prices are projected to save the federal government $100 billion over the next several years. Crucially, this means that the negotiations won’t just benefit people who are on these specific medications; the savings are passed along, indirectly, to everyone on Medicare.
Other changes, thanks to the Biden Administration, will include a cap of $2000 per year on out-of-pocket Medicare spending, and significantly lower costs for insulin. Other changes include an income-based subsidy for the most vulnerable Medicare enrollees, making all adult vaccines recommended by the Centers for Disease Control and Prevention free for everyone with Medicare Part D, and requiring drug companies to pay a rebate to Medicare if they increase prices faster than inflation.
There has been very little media attention to these hard-won changes, presumably because skill at the actual business of governing is less sexy than wall-to-wall coverage of threats to desperate immigrants and hush-money payments to porn stars.
In her “Letters from an American,” Heather Cox Richardson often compares the autocratic and corrupt self-interest of Trump and the MAGA movement to the Biden Administration’s focus on making life better for average Americans.
Reducing the cost of lifesaving prescription drugs– rather than limiting women’s reproductive liberties and forbidding medical providers to assist trans children– is a perfect example of the wildly different priorities of today’s Democratic Party and the Republican MAGA cult.
In November, vote accordingly.
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