Democrats campaigned before the midterm elections earlier this month on the falsehood that Republicans were threatening to cut Medicare and other benefits for seniors. As it turns out, Joe Biden has led his party to a true slashing of benefits through the ridiculously named Inflation Reduction Act.
An op-ed by two economists published on Tuesday by the Wall Street Journal shows how the massive spending bill actually cuts payments for prescription drugs for senior Americans.
The piece by Casey B. Mulligan and Tomas J. Philipson also shows Biden’s signature bill will increase Medicare premiums while slashing benefits.
Two economists reported that Biden is cutting Medicare benefits in the Inflation Reduction Act, which cuts payments for prescription drugs. https://t.co/uPQgHgW0ZH
— Breitbart News (@BreitbartNews) November 23, 2022
They write that private plans participating in Medicare’s Part D prescription drug program have three possible sources of revenue to pay for medications. Insurance providers must either charge out-of-pocket expenses to patients, take in premium payments, or receive subsidies from the federal government to pay for prescription drugs.
The Inflation Reduction Act will begin sharp cuts in federal subsidies and out-of-pocket payments in 2025. That means premiums will be forced to make up the coming revenue shortfall.
However, the law also restricts premium increases from going up more than 6% annually. That will not even cover current inflation rates, much less the loss of federal subsidies.
Mulligan and Philipson estimated that starting in 2025, the federal subsidies provided by reinsurance for beneficiaries with the most medication expenses will be cut by $30 billion. That will directly impact the $110 billion needed to pay for Part D. That loss cannot be made up by insurance providers absorbing the loss, as they already have a very thin margin.
Biden has trumpeted his administration’s efforts to reduce prescription costs, even though he revoked an executive order issued by President Trump to lower the prices of insulin and epinephrine during his very first week in the White House.
It will be another two years before Americans will have the opportunity to hold Democrats accountable for the disastrous impacts of the so-called Inflation Reduction Act. Sadly, those least able to absorb the damage will be among those who will suffer the most in the meantime.
