Editor's Note: This column is co-authored by Andrew Langer and David Safavian.
President Biden signed the Inflation Reduction Act (IRA) into law two years ago, and since then, the White House and Democrats in Congress have raved about the “success” of the law and its extraordinary impact on our healthcare system. Vice President Kamala Harris, the Democrats’ hand-picked nominee for president, recently claimed that she will commit to lowering prices if she wins the presidency on DAY ONE of a Harris Administration despite being the second-highest official in the federal executive branch.
Yet, it’s fair to recall that none of the Biden-Harris Administration’s previous actions have been remotely successful at lowering prices so far. None. As in, not a single action taken by this administration has resulted in lowering prices. Now, she’s working with President Biden to roll out a new plan that spells disaster for American healthcare and millions of patients who rely on it—making good on a campaign promise she made in 2019 to use the enormous power of the federal government to try and force prices down.
When Democrats jammed the IRA through Congress, they quietly diverted $260 billion from the Medicare trust fund to pay for wasteful spending on so-called “green energy” projects and other liberal wish-list items.
Compounding the horrible impact on senior healthcare, they implemented the law’s left-wing prescription drug provision that they falsely call the Medicare Drug Price “Negotiations.” Like the scene in The Godfather, the Medicare negotiation provision allows the government to “make an offer drug companies can’t refuse.” Failing to acquiesce to the demands of Democrat demagogues and bureaucrats triggers billions in new taxes.
When one party holds the equivalent of a gun to the head of the other party, nobody can, with a straight face, call it a “negotiation.” It is an order—an order issued under penalty of grievous harm if the party with the gun to its head doesn’t comply. In reality, the IRA establishes socialist-style price controls that remove all incentives for companies to create new medications. It discourages innovation, reduces access, and, over the long term, harms patients.
More diseases will go untreated and more seniors will die because the so-called “negotiations” are destroying the US’ world-renowned innovation pipeline. But do Democrat politicians account for the increase in suffering and death? Simply put: no, they don’t. It just doesn’t matter to the Left, which orchestrated this legislative disaster because, in the short term, they got a political “W” in their win column.
Worse, the most recent data indicate that the IRA didn’t really reduce costs. To the contrary, it’s just the opposite, Americans are paying more overall. Since Kamala Harris broke the tie in the Senate to enact the IRA, seniors in Medicare Part D—a program that allows older Americans to afford their medications—have seen their premiums increase and their options dwindle. Within the past year, the average monthly premium increased 20% or more. At the same time, the number of prescription drug plans available to enrollees has dipped to the lowest amount since the program’s rollout in 2006.
A recent report from Centers for Medicare and Medicaid Services (CMS) makes it clear that prices will continue to spiral. CMS announced that the national average monthly bid amount used to calculate premiums is $179.45—a striking 179% increase from last year’s bid of $64.28. Seniors had better prepare for significantly higher insurance costs resulting from the Democrats’ IRA policy failure.
Left-wing politicians are panicking at this news, and they should be. But their policy reaction is similarly disastrous: they hope to put off the day of reckoning until after the 2024 election by giving insurers cash subsidies to keep quiet. Like the student loan “forgiveness,” these subsidies are little more than a cynical (and legally dubious) attempt to buy votes. They hope to keep voters in the dark about exploding healthcare costs directly related to the Biden-Harris-Schumer-Pelosi policies.
Thankfully, the Administration’s effort to reduce the higher costs from IRA policies artificially has drawn the attention of lawmakers. House and Senate members have written to the Government Accountability Office, urging them to investigate the program, which “lacks any budgetary analysis, clear statutory basis, or credible research goals.”
Analysts estimate that the cover-up demo program will drain the Medicare Trust Funds by an estimated $72 billion over the next three years. The money will go to big health insurers (whose Pharmacy Benefits Managers [PBMs] are already ripping off the American people and causing high drug prices) to stave off explosions in premiums.
This move comes at the expense of Medicare and benefits the big insurer-PBMs that helped make the IRA a reality in the first place. For Democrats, this new rollout kills two birds with one stone by supporting their allies while altering the narrative regarding the impact of the IRA on healthcare. It’s a cheap—yet costly—tactic to gain political approval at this critical time.
In this contentious election year, liberals are concerned about the optics of their failed law. Instead of facing the political consequences of this, they are now attempting to deceive the public and hide the true cost of the IRA. Americans must know better than to buy into this scheme.
Andrew Langer is director of the CPAC Foundation’s Center for Regulatory Freedom and Executive Director of the Coalition Against Socialized Medicine (CASM); David Safavian is the General Counsel and Executive Vice President of CPAC.
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