‘Drug pricing reform’ will kill people

The Affordable Care Act, aka Obamacare, was a failure. It was supposed to have about 25 million people signed up to its exchanges to date, but signups have stuck at around 10 million people since 2015.

This is largely because Obamacare specifically banned smaller insurance plans and therefore shut many people out of the insurance market. Premiums and deductibles in the individual insurance market are high, and the plan includes fewer providers than employer-sponsored insurance plans.

Enrollment is, unsurprisingly, concentrated among low-income people who receive large taxpayer subsidies that cover most or all of the costs.

In short, the program has not achieved its goal of insuring more people, and taxpayers are paying a sizable portion of the costs of those who are insured.

Despite this, congressional Democrats are refusing to admit defeat and, as part of the US bailout, are increasing the size and scope of subsidies for insurance coverage. There’s a twist this time – still looking to increase the number of people on government payrolls, congressional Democrats have designed the new grants so that most new spending will go to those who already have health insurance coverage.

That’s right, the new grants help wealthy Americans more than low-income ones. Households earning above 400% of the federal poverty level (about $110,000) benefit significantly more from these new subsidies than those earning near the poverty line (many of whom already have taxpayer-subsidized health insurance) .

The subsidy is also designed so that the more you spend on health insurance, the more tax dollars you receive. Because older Americans tend to use more health insurance, wealthier and older Americans receive more tax dollars than younger and poorer Americans.

In short, it is an extremely regressive program that transfers taxpayers’ money to the rich and exacerbates income inequality. It also shifts the cost of private insurance to taxpayers, which means more federal spending now and in the future.

Those who own or work in a small business or those with a low income and an older workforce also lose out, as these businesses now have an incentive to stop offering group insurance. The uninsured also lose. About 75% of the $34 billion we will spend on the tax credit over two years will go to people who already have health insurance, rather than the uninsured.

Who could be in favor of this mess?

You will be amazed to learn that insurance companies are in favor of getting their hands on a steady stream of cash from the federal government. Those who want to impose government-run health care are also big fans — the obvious goal of the program is to eventually move toward a government-run health care system.

The free money from the federal government is nearly unstoppable once it starts, so it’s no surprise that Senate Democrats want to extend these grants to the wealthy as part of budget reconciliation. They have to: Republicans, for good and obvious reasons, refuse to toy with the idea of ​​subsidizing insurance premiums for the wealthy.

That, coupled with the likelihood that Republicans will at least control the House within seven months, means the reconciliation currently on hold in the Senate is the last chance Democrats will have to extend those grants before they expire.

Reconciliation, as you may recall, began with a rather impressive list of progressive priorities. In a perfect microcosm of what has happened to the Democratic Party over the past 30 years, it is now reduced to a vehicle to ship even more money to the upper middle class.

The story has one last terrible twist. One of the revenue streams that Democratic Senator Joe Manchin III of West Virginia keeps talking about is “drug price reform,” which really means “government price controls.” Federal bureaucrats would set the prices for the life-saving and life-enhancing drugs that almost all of us need or will need.

What do you think the outcome of this will be?

If you guessed fewer new drugs, more premature deaths, and more suffering, go ahead of the class. In a recent report, economists at the University of Chicago concluded that “drug price reform” would reduce drug research and development spending by $663 billion through 2039, or about 19%. This means that 135 fewer new drugs would be made available to doctors and patients.

This lack of life-saving drugs would cause 331.5 million years of life to be lost in the United States – a reduction in lifespan roughly 30 times that of COVID-19 at the end of 2021.

That’s a lot of premature deaths — and a lot of preventable suffering — just so a wealthy few can get health insurance subsidies and congressional Democrats can get closer to full government control of health care.

• Washington Times columnist Michael McKenna is president of MWR Strategies. He was most recently Deputy Assistant to the President and Deputy Director of the Office of Legislative Affairs at the White House.

Julio V. Miller