President Joe Biden announced a plan Tuesday to keep Medicare solvent by relying on even more aggressive price negotiations with the pharmaceutical industry than Congress has already agreed to.
The president claims it’ll result in $200 billion in savings.
The president is living in fantasyland.
In just a decade, $200 billion? That’s quite a claim considering the nonpartisan Congressional Budget Office has said such negotiations “would have a negligible effect on federal spending.” Talk about playing poker with money you don’t have.
The reality is these negotiations’ main consequence will be the US healthcare system falling further down the slippery slope of federally mandated price controls, restricting patient choice and destroying the research-and-development system that makes America the world leader in medical innovation.
Uncle Joe Fantasyland Part Two is that the Federales “negotiate.” In fact, Uncle Sam will set the price, and the only “negotiation” is “Take it or leave it.”
As the CBO notes, “no further savings are possible unless the government restricts beneficiary access to medicines.”
Without putting too fine a point on it, price controls equal choice controls. Biden’s fantasy Medicare scheme will create a death spiral, literally and financially.
Under his plan, the price of newer, more expensive medicines will be cut by up to 75%.
If companies don’t “negotiate,” they pay a penalty of 95% of their total revenue for that year.
Organized crime never had such clout. Talk about an offer you can’t refuse.
This isn’t a wild prognostication. The US Department of Veterans Affairs plan illustrates the point. The VA offers 1,300 drugs compared with 4,300 available under the free-market-designed Medicare Part D. --->READ MORE HERE
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| AP Photo/Evan Vucci |
In a preview of his budget plan to be released this week, President Biden on Tuesday rolled out a proposed tax hike on high earners as part of his complicated plan to raise money to keep Medicare solvent.
Under Mr. Biden‘s blueprint, Americans earning $400,000 would pay higher taxes on their investments, pharmaceutical companies would be required to pay into Medicare for certain price hikes, and a cap would be imposed on what Medicare Part D pays for many popular drugs.
The White House says the plan would protect Medicare — a program that more than 60 million seniors depend on for health insurance — into the 2050s without cutting benefits.
A key Medicare trust fund is expected to run out in 2028 under current tax and spending levels because it’s shelling out money at a much greater rate than it’s bringing in. That means it faces automatic federal cuts in 2028, creating the possibility that Medicare providers will deny care to the elderly unless Congress and the White House come up with a plan.
Mr. Biden‘s proposal would increase the net investment income tax on capital gains and investment income from 3.8% to 5% for all Americans earning more than $400,000 per year. The plan would also impose new taxes on certain businesses that are not subject to the corporate income tax.
“High-income people are supposed to pay a 3.8% Medicare tax on all of their income, but some high-paid professionals and other wealthy business owners have managed to shield some of their income from tax by claiming it is neither earned income nor investment income,” the White House said in a statement. --->READ MORE HERE
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