In the last few weeks, House Subcommittees have conducted important hearings on President Joe Biden’s implausibly named “Inflation Reduction Act” and its assault on Medicare.
The law is an assault on Medicare because it violates a core promise of the program – that in exchange for paying a special payroll tax your entire working life, the program will be there for you when you are older.
The law uses so-called savings from reduced spending on prescription drugs (more on that in a moment) to help pay for $500 billion in green energy and Obamacare subsidies.
This is a promise broken because the entire point of a dedicated payroll tax is that the funds are to be used for Medicare. The only way the IRA was able to accomplish the green energy and Obamacare spending without increasing overall government spending (which you can’t do if you are trying to claim the bill will reduce inflation) is to cut spending elsewhere. Analysis of the bill clearly shows that the offset spending comes out of Medicare.
The American people understand this is a violation of the promise of Medicare. Research we conducted at America’s New Majority Project revealed that 67 percent of Americans agree that any savings found in Medicare should be kept in Medicare. Most say those savings should be used to improve benefits. In addition, 59 percent say (correctly, it turns out) it is likely that programs which allow the government to reduce Medicare spending on prescription drugs would lead to the savings being spent elsewhere.
The White House and Democrats will claim that the IRA does not actually violate the promise of Medicare because seniors will still get the care they need despite the diversion of the funds. This is a falsehood, and Americans know it.
The IRA achieves its savings from Medicare through the imposition of price controls on drugs, which the White House and Democrats refer to as “negotiation.” In truth, the negotiation is Kabuki theatre. The process disrupts the highly successful private sector negotiation that is the foundation of Medicare Part D and enables government bureaucrats to set a take it or leave it price it is willing to pay for critical drugs.
Our research also revealed Americans understand the tradeoff between increased government control and doctor-patient autonomy. Sixty-five percent of voters say it is likely that price control programs such as those found in the Inflation Reduction Act would lead to more influence for lobbyists and less control by doctors and patients. Sixty-three percent say these programs would ultimately lead to seniors not receiving the medicines their doctors recommend.
Unsurprisingly, the American people are pretty smart. Multiple analyses have shown that the IRA’s plan to allow Medicare to set prescription drug prices will deter critical investments in new drug development. According to an analysis by Horizon Government Affairs, 24 drug companies have already announced they are cutting back on drug development due to the bill. It’s even possible that the plan could result in some currently available drugs being pulled from the market.
Clearly, there is a case to be made to the American people that the Inflation Reduction Act is bad medicine. Americans understand the principles behind the concerns about the impact of the program – and the facts are there to validate those concerns if we can make the people aware of them.
The hearings held so far are a good first step to educating the American people and exposing the IRA’s assault on Medicare. They should be reinforced by lawmakers in their communications with constituents to continue to make the case against the law – and highlight alternative solutions to make drugs more affordable for Americans that don’t endanger innovation and access.
Newt Gingrich was Speaker of the U.S. House of Representatives from 1995-1999 and a candidate for president in 2012. He is Chairman of Gingrich 360, a consulting and multimedia production firm, some of whose clients are impacted by the Inflation Reduction Act. For more commentary from Newt Gingrich, visit Gingrich360.com. For more polling on this and other issues, visit AmericasNewMajorityProject.com. This article was originally published by RealClearHealth and made available via RealClearWire.
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