It’s been a tough year in the health policy trenches, but we are ever optimistic that 2023 will bring new opportunities to advance health freedom.
With Democrats in control of both houses of Congress and the White House, we have taken many hits:
Prescription drug pricing: Liberals finally notched their long-sought goal of enacting legislation to allow the federal government to “negotiate” prescription drug prices—much as a person being robbed negotiates with a guy with a gun. The outlook is grim.
Tomas Philipson of the University of Chicago and formerly head of the WH Council of Economic Advisors explained in a recent Consensus Group meeting the damage to medical innovation from the Inflation “Reduction” Act (IRA), which includes the drug provisions, and the life years that will be lost from drugs being cancelled and many others that never will be discovered or developed.
“Over the next 17 years, the bill would reduce drug industry research and development by about $663 billion, resulting in 135 fewer new medicines. This will amount to a loss of 330 million life-years, about 30 times the loss from COVID-19 so far,” he explains.
And for what? Mark Pauly of the Wharton School at the University of Pennsylvania and colleagues have a new peer-reviewed study published by Cambridge University Press showing that, on average, branded drugs studied for cost effectiveness are a bargain.
“Compared to commonly proposed threshold monetary values of additional health benefits, our findings indicate that U.S. branded pharmaceutical treatments are priced on average below the value of the health benefits obtained,” they write.
Joel White, who heads the Council for Affordable Health Coverage, hosted a congressional briefing last week, giving a detailed overview of the implications of the IRA. Julia Jenkins, executive director of EveryLife Foundation for Rare Diseases, spoke and described patients, especially children, who have seen their only hopes for treatments and cures vanish since passage of the law in August.
Will this law go the way of the Medicare Catastrophic law from the 1980s which was repealed after senior citizens chased W&M Chairman Dan Rostenkowski out of his own town hall meeting?
Possibly. Philipson explains, with his colleague Casey Mulligan, the harm seniors will feel by 2024: “The Inflation Reduction Act Comes for Medicare. It will cut benefits and increase premiums, upsetting millions of elderly voters.”
Kirsten Axelsen hosted an event at AEI with a deep dive on its impact on innovation and the price patients will pay.
Medicaid: Medicaid, designed for the poor and most vulnerable, now covers 97 million Americans—with states heavily bribed by the federal government to keep ineligible people on the rolls.
A new paper by Prof. Chuck Blahous of the Mercatus Center at George Mason University shows that states that expanded Medicaid under the ACA are providing fewer services to children (and other vulnerable populations) than states that didn’t expand. “The Affordable Care Act’s Medicaid Expansion Is Shifting Resources away from Low-Income Children.”
As we had said from the beginning, the ACA provided an incentive for states to prioritize younger able-bodied citizens at the expense of more vulnerable patients who have nowhere else to go for coverage. This is proof.
Expanding Obamacare: The Biden administration took a sweeping and we believe illegal action to expand Obamacare to millions more people, most of whom already have coverage elsewhere. Our comment letter, signed by 36 colleagues, didn’t stop the administration from finalizing the rule. Doug Badger explained it all in Health Affairs: “The IRS Cannot “Fix” The “Family Glitch.”
And then Congress once again extended more generous “temporary” Covid tax credit subsidies. Brian Blase explains in “Expanded ACA Subsidies: Exacerbating Health Inflation and Income Inequality” that “A family of four with a 60-year-old head of household earning $265,000 could end up eligible for more than $7,800 a year in taxpayer subsidies.”
Government waste: No one is watching the store over public health spending, and it is desperately in need of oversight and reform. A new paper, “America’s Largest Health Care Programs Are Full of Improper Payments” by Brian Blase and Joe Albanese of the Paragon Health Institute, provides details:
“Waste, fraud, and abuse in federal health care programs are perennial problems, and large payment errors are a sign of deeper program mismanagement. Recently released data shows over $130 billion per year in improper payments, which are largely driven by unwise Medicaid policies and lax program integrity efforts.”
This is expected to tee up hearings in the new Congress to educate people about these problems and the better ideas that conservative are offering.
We outlined earlier the agenda that free-market, patient-friendly advocates should pursue in the new Congress, starting by building on the successes of policies that support health freedom, patient choice, transparency, and competition to drive prices down.
New House leaders told us they are going to tackle health care to advance these and other market-based ideas—starting with hearings to expose the damage that the Left’s aggressive government-centric programs are doing—as well as explaining how positive health policies can usher in a new era of health freedom and innovation.
We are all in.
All best wishes for a Merry Christmas, a Happy Hanukkah, and a Blessed New Year. See you in 2023.
