We have all heard the joke, “I’m from Washington, and I’m here to help.” It is a classic punchline that highlights the ineffectiveness and disastrous intervention of government.
In the case of the Inflation Reduction Act (IRA), it is right on the money.
The Inflation Reduction Act has been an unmitigated disaster. Far from its name, the law has worsened inflation by squandering billions on progressive initiatives like “Green New Deal” tax credits that ultimately benefit China, electric vehicle giveaways, and increased subsidies to insurance companies and wealthy families enrolled in Obamacare. Moreover, the law imposed new taxes on U.S. businesses, endangering their ability to provide jobs for millions of Americans.
Further, as a political issue, Republicans can make the case that this law was a broken promise to the American people. When we look at the election for president coming down to a handful of votes in the swing states of Michigan, Pennsylvania and Wisconsin, we see anger in those states centering on kitchen table issues. A June 2024 poll of swing state voters conducted by Ipsos found that inflation and increasing costs are the No. 1 issue with voters in those states.
To make matters worse, the IRA stripped a staggering $300 billion from Medicare to fund President Biden’s pet projects. At a time when numerous seniors are struggling, reducing funds from Medicare for current and soon-to-be retirees is incredibly foolhardy. Congress must allocate the savings in Medicare toward enhancing the program and preventing costly taxpayer-funded bailouts rather than being treated as a slush fund for opponents’ agendas.
Despite Democrats’ claims that changes to Medicare would alleviate financial burdens for Americans at the pharmacy, it appears that the law has made it more challenging for patients to obtain medications. My mother, who is undergoing cancer treatment, is on a fixed income, and the rise in inflation and the increased cost of her prescription is a hardship. She and millions of seniors like her agree the IRA has failed to provide any relief, and the consequences are clear to see.
Progressives proclaimed this jumble of legalese as a benefit to seniors by authorizing government officials to enforce price controls on certain medications covered by Medicare. However, it has had the opposite effect. The IRA has not delivered the promised savings to seniors. Instead, it has increased costs.
Monthly premiums for Medicare Part D drug plans have surged significantly following the implementation of the IRA. According to the Kaiser Family Foundation, premiums for Medicare prescription drug plans rose by 21 percent in the first year after the law was enacted. The Council for Affordable Health Coverage anticipates a potential additional increase of more than 50 percent next year. At the same time, the number of Part D plan options available to seniors has plummeted.
The IRA also established a costly $3 billion federal bureaucracy, part of the overall goal of putting the federal government in charge of all medical decisions, allowing further government intrusion in decisions that should be left to patients and their healthcare providers. History has shown that imposing price controls rarely achieves the desired outcomes, and the IRA’s price controls are no exception.
The law has inadvertently led to higher premiums for prescription drug coverage rather than enhancing access to affordable medicine for seniors. This unexpected outcome highlights the need for Congress to focus on reducing Medicare premiums, expanding plan choices, and ensuring that insurers and pharmacy benefit managers pass on discounts, rebates and savings to patients. Additionally, lawmakers must examine the practices of foreign countries that buy U.S.-developed medicines at meager prices, leaving American patients to bear the burden.
Given the detrimental effects of the IRA, meaningful, market-based reforms must be implemented for the betterment of all Americans.
Reprinted with permission from DC Journal by Leif Larson.