Finance / Health & Wellness / Politics

Trump Does it Again – Helps Seniors, Lowers Drug Prices, Rebuffs Congress

drug-prices

Good news for seniors keeps coming.  Beyond a robust economy and low inflation, other measures of future satisfaction are rising.  Specifically, the Trump Administration is making good on another promise.  It is moving to lower drug prices by implementing a “proposed ban on certain pharmaceutical-industry rebates in Medicare,” according to the Wall Street JournalThis move is bold, significant and overdue.

Phase one was reported several weeks ago, an intention.  Phase two is action.  The Trump team seems not to waste much time. In effect, while the administration would offer risk mitigation to health insurance companies, they would no longer allow rebates on fixed drug prices charge to store-front providers of prescription drugs. 

These rebates were seldom passed along to consumers, which meant middle men got benefits, but consumers – many of whom were older Americans – just paid the bigger bills.  That will now stop, rather abruptly.  By offering risk mitigation, the Administration aims to keep premiums from rising as insurers no longer benefit from rebates. 

Who will pay for the risk mitigation that now lowers costs for older Americans at the drug store or pharmacy window?  As rebates are banned and insurers forced to become transparent and accountable, ending the fake world where insurers charged higher prices to consumers for which they the insurer got a rebate, who will cover the transitional costs? 

In truth, the federal government – which means those in prime tax paying years.  But while not perfect, this keeps the costs to seniors down, and sets up a more transparent system in which those young now will later pay more fair and open prices ahead. 

Rather ironically, Democrats do not like this Trump plan, not because it costs federal money in the transition or because it helps seniors pay for necessary prescription drugs, but because it ends a cozy deal they like.  It creates new efficiencies in distribution that may reduce the need for Obamacare subsidies, restore free market forces, and undercuts the profit for some health insurers. 

To be specific, the Wall Street Journal reports that, “the rule would half billions of dollars in discounts that drug-makers give insurers and companies such as CVS Health Corp. and UnitedHealth Group Inc. that administer Medicare prescription plans.”  By contrast, the Secretary of HHS reportedly believes “it would spur makers to pass discounts directly to patients and bring new transparency to drug markets.”

All this raises a more prosaic question:  Who is really fighting for the little guy?  One would have to say, in this context, the President is doing that – as the Democrat majority in the US House resists, either because they do not get it,  do not want to get it, will not support a good idea coming from the Administration, or perhaps get campaign donations from those who oppose the idea. 

In the event readers this last link too attenuated, the Center for Responsive Politics reports that Nancy Pelosi received from Health Professionals nearly $300,000 total in the last cycle, and among contributors were name-recognized members of healthcare’s corporate community. 

Net-net, the reality is plain, persistent and encouraging.  The President is again focused on helping elder Americans, especially when it comes to health care.  He is seeking to lower drug prices, and even in the latest Washington flap about Obamacare’s judicial future, was quick to point out that – no matter what the courts decide, he will support coverage for preexisting conditions.  In the end, good news tends to get crowded out by the bad, but President Trump keeps making good news – and this is just a little more.  If history is won by inches, we just gained a few.  That is reason to smile.

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Annie in Texas
2 years ago

All I know is I went in to pick up my ex-husbands prescriptions, 2 of 11 he is on, and it jumped from $4 to $13.46. I tell him he brought all this on himself, he is 79 and refused Medicare a long time ago and pays for Blue Cross Blue Shield through Civil Service. He no longer has vision care of dental either. He needs round the clock care now and has for the last 5 years but he makes $200 over the limit to get on Medicaid. So others are helping him with transportation to Dr, picking up his groceries and so on. I did get him on Medicare part A to cover longer hospital stays or if he is sent to rehab. The penalty to get him on Medicare is far too great, so he is stuck and so is everyone else. Trying now to work with VA some to get him round the clock care.

Robert N.
2 years ago

All these deals upon deals upon laws… I sincerely believe that moving away from employer and gov’t dependence to individual healthcare control is the best course of action… the article mentions the cost of middlemen, but the bureaucracy of the govt and govt itself is a huge middle cost.

We need to have before tax healthcare accounts that can be used to pay for all healthcare with before tax dollars. We need this for healthcare, long term care, unemployment insurance, workman’s compensation, and we need to move away from gov’t to individual and non-profit healthcare.

Just by letting citizens pay for healthcare with pre-tax dollars we are infusing these individual’s healthcare accounts with those taxes! Furthermore, if we remove sales taxes on healthcare goods and healthcare we are further infusing the healthcare accounts with this funding. We could also give a 100%+ tax write-off for donations to one’s own healthcare savings account (we just give say a 105% write-off if they reach the estimated average needed, bottom line on this incentivize citizens to save for their own healthcare). Yet another way to add more funding to this is to let people opt to redirect up to 90% of their Medicare taxes to the account if they match them, the other 10% would go to citizens who aren’t able to move to the new healthcare from Medicare. We continue Medicare for those who want it, but we allow people to move off if it permanently.

We could also help increase the # of healthcare facilities (hospitals, urgent care, emergency rooms, even doctors and PAs) by allow a 105% deduction for donations to non-profits that create and provide these facilities. We could further fund this by making sure non-citizens cannot drain the limited funds preventing them from having access to these citizen only taxpayer funded services. Those who want to advocate for non-citizens could still do so, but with their own money giving to non-profits who help them. It is patently wrong to take from one taxpayer to give to another and even more wrong to give taxpayer $ to someone who doesn’t pay taxes. If the taxpayer deems the cause worthy, then they can give their own money to it.

Lest you think we do not care, we give more than 10% of our income to charities and our life goal is to try to get to a point where we live off of 10% and help others with the remaining 90%. We just don’t believe the govt or businesses should do this.. .it should be the individual… as a stockholder the business shod not be involved in charity with my investments as they may be forcibly giving to causes I do not agree with, instead pass along all my returns and I will give to the charities of my choosing.

Dan W.
2 years ago
Reply to  Robert N.

The question is: Would people save with pre-tax dollars for healthcare ? For comparison, if the question is: Do people save with pre-tax (or post-tax) dollars for their retirement, the answer is: Not very well.

“Nearly half of families have no retirement account savings at all,” the Economic Policy Institute (EPI) reported, even in savings vehicles such as IRAs and 401(k)s. The median for U.S. families is just $5,000, and the median for families with some savings is $60,000.

And, according to a 2016 GOBankingRates survey, 35 percent of all adults in the U.S. have only several hundred dollars in their savings accounts and 34 percent have zero savings.

Even older workers who can see retirement on the horizon aren’t prepared for it. The median savings for families whose wage earners are between 50 and 55 years old is only $8,000. For those who are between 56 and 61, it’s $17,000, reports the Economic Policy Institute.

Do you really think that if people are left to their own devises, that they will save any more efficiently for their healthcare expenses than they are currently saving for their retirement expenses ?

Dan W.
2 years ago

The President is doing his best unilaterally to lower prescription drug prices.

Now if Congress could wean itself off all of the money that the drug companies are sending them and lift the restriction that prevents Medicare (the CMS) from negotiating drug prices with the drug companies, we could see some significant cost savings.

PaulE
2 years ago
Reply to  Dan W.

Dare to dream. Lots and lots of very large campaign donations from big pharma and other entities in the medical indudtry find their way into the coffers of way too Congressional politicians. We both know how the deal works. Congress agrees to NOT create and pass legislation that would impact the profitability of pharmaceuticals in the United States only as long as those big campaign donations continue to flow. It is like the old protection racket in many ways. The business owner, in this case all the pharmaceutical companies, pay the thugs, in this case members of Congress, to ensure the thugs won’t destroy the business. The only real difference between the old protection racket and the new one, is in the old days the thugs just broke things or burned the business down. In the new way, as practiced by Congress, their weapon of choice is the pen to draft legislation that effectively does the same thing.

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