Yet another problem created under the Biden administration has been dropped in the Trump administration's lap. The arrival of fall and the upcoming renewal of healthcare plans will result in a lot of sticker shock for those on Medicare, with prescription drug plan premiums due for a big increase this year. Democrats and the legacy media will likely try to blame this on President Trump and the GOP, but critics point out it was Biden and the Dems that broke Medicare. Specifically, it was the 2022 Inflation Reduction Act, which included price controls on prescription drugs and new mandates to shift more costs to insurance companies.
Three years later, we're getting the predictable results of those policies. "When you have mandates and you have strict price controls, prices typically end up going up," says David Balat, healthcare CEO and analyst. "Look at prices in healthcare generally in the last several years...the more the government has gotten involved and the more control they've had over the industry, the prices have just skyrocketed."
Heavy-handed government tactics that appear to stick it to insurance companies may be a sugar high for politicians, but they don't actually reduce healthcare costs. Instead, they just shift costs around until they eventually end up back at the consumer, as we're seeing now. Democrats even saw this coming last year, which is why they approved billions in subsidies to insurers in order to keep premiums down ahead of the election.
Balat warns that healthcare costs won't start falling unless we get rid of the middlemen in the system. "Until we get to the root cause, which in a lot of cases are the pharmacy benefit managers and the insurance companies wanting to retain a lot of these rebates, we're going to continue to have this problem," he says. "We're the only country that uses this third-party group---pharmacy benefit managers---and we're the only country that has pharmacy prices as high as they are."
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