Democrats wish to raid Medicare to pay for Obamacare – again | Open


There have been loads of ingredients within the 2010 Republican electoral landslide. Perhaps essentially the most significant was that by raiding $787 billion from Medicare to pay for Obamacare, Democrats gave the “Medicare cuts” club that they had used to beat Republicans over the top for a long time to their opponents, who then hammered away at them.

Remarkably, twelve years later Democrats may – in a last-ditch try and salvage something from the wreckage of Construct Back Higher – repeat the very same mistake again.

This time the vanity is that they’ll drain $200 billion or more from Medicare prescription drug spending and in some way sell that to seniors politically by calling it “drug pricing reform” – then use that cash to purchase political support via more generous Obamacare subsidies.

The Democrats’ plan would impose price controls via a so-called negotiation during which the federal government would dictate the costs Medicare pays for drugs to manufacturers, who would face a tax of 95 percent of their total sales in the event that they said no. A classic mob-style “offer you possibly can’t refuse.”

Proponents pretend this can be a free lunch, that seniors may have access to the identical drugs at steeply lower prices. Reality doesn’t work that way.

Imposing price controls to siphon a whole lot of billions of dollars out of Medicare prescription drug spending will clearly lead to few latest cures and coverings available to seniors. An evaluation of an earlier version of the Democratic price control plan by University of Chicago researchers found that it could result in between 167 and 324 fewer drugs being developed over the subsequent 20 years, with biopharmaceutical research and development spending reduced by greater than a trillion dollars.

Meanwhile, the medical health insurance industry has been feasting on larger-than-ever Obamacare subsidies that were stuffed into Biden’s $1.9 trillion “COVID relief” bill. The thought of fattening up subsidies when claims were at historic lows as people avoiding looking for health care in the course of the pandemic never made sense, but Biden did it anyway.

Now the large insurance firms are in all-out lobbying blitz to get the expanded subsidies prolonged, claiming it’s the only solution to avoid sharp premium increases – though health system utilization continues to be below 2019 levels as many individuals remain hesitant to return to doctors and hospitals.

As in 2010, the insurance industry is counting on AARP – which makes greater than a billion dollars per 12 months in corporate royalties, mostly from UnitedHealth – to hold their public relations and lobbying water. The plan, clearly, is to empty money from Medicare drug spending to funnel it to the insurance firms.

The bet by Democrats could be that lower prices through “negotiation” is a neater to clarify message in a campaign context than “price controls cause shortages.” Perhaps so. However the Republican message could possibly be much simpler than that. So simple as: “my opponent voted to empty a whole lot of billions of dollars out of Medicare to spend on Obamacare.”

We’ve seen that one before. The result? Republican landslide.

Phil Kerpen is the president of American Commitment and the writer of “Democracy Denied.” Kerpen might be reached at


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