President Biden’s top priority is to cut costs for the American people. He was proud to sign the Inflation Reduction Act into law, taking on Big Pharma to allow Medicare to negotiate prescription drug costs for the first time, capping elderly pharmacy drug costs and the cost of insulin, and reducing health insurance premiums for people who get coverage through the Affordable Care Act. President Biden and Democrats in Congress are committed to protecting and strengthening Social Security and Medicare.
Republicans in Congress have a very different vision. They promised to strip Medicare of the right to negotiate drug prices and remove the $2,000 cap on pharmacy out-of-pocket costs. Republican senator from Florida and chairman of the National Republican Senatorial Committee Rick Scott has supported a plan to put Medicare, Medicaid and Social Security on a five-year cycle. In addition, congressional Republicans have repeatedly vowed to hold the U.S. economy hostage by refusing to raise the debt limit unless they can cut Social Security and Medicare benefits for tens of millions of Americans. already paid in
Here’s what the congressional Republicans’ plan would mean:
Part I: Putting essential programs like Social Security and Medicare on the chopping block and threatening the global economy unless those programs are cut
All Medicare, Medicaid and Social Security beneficiaries would see their benefits threatened by Sen. Rick Scott’s plan to put those programs on the chopping block every five years. Sen. Ron Johnson’s vision of putting them up for a vote every year would make that even worse.
Republican leaders in Congress have also repeatedly said they would use the debt limit as leverage to cut those essential programs. Republicans in Congress have supported cuts to Medicare and Social Security, including:
- Gradually increasing the Medicare eligibility age to 67 and the Social Security eligibility age to 70. (Republican Budget Study FY 2023)
- Transforming Medicare benefits into a voucher where seniors would receive a fixed amount of money to purchase a private health plan (a better way plan) or offering beneficiaries the option to switch to a premium support system (Republican Committee on FY 2023 study)—which could result in hundreds or thousands of dollars in additional out-of-pocket costs for seniors across the country.
Part II: Repealing the Prescription Drug and Health Care Provisions of the Inflation Reduction Act
President Biden has worked for decades to allow Medicare to negotiate drug prices, and it’s finally happening thanks to the Inflation Reduction Act. This would save billions of dollars both for Medicare beneficiaries, who would receive reduced premiums and out-of-pocket costs, and for the federal government. Estimates by the Kaiser Family Foundation suggest that about 5 to 7 million beneficiaries each year use the kinds of expensive drugs that could be subject to negotiations and would directly face higher cost sharing if those provisions are repealed.
The Inflation Reduction Act also requires prescription drug companies to pay rebates if they raise drug prices faster than inflation. According to an analysis by the Department of Health and Human Services, the cost of 1,200 prescription drugs has risen faster than inflation in the past year alone—some prescription drugs have increased by $1,000 in just one year. If congressional Republicans repeal the Inflation Reduction Act, drug companies will be able to continue raising prices without paying a rebate, instead of putting that money back into Americans’ pockets.
Before the Inflation Reduction Act, Medicare beneficiaries with conditions such as cancer, multiple sclerosis and lung disease could face thousands of dollars in out-of-pocket prescription drug costs per year. Thanks to the Inflation Reduction Act of President Biden and congressional Democrats, these costs will be capped at $2,000 per year, saving more than 1 million beneficiaries an average of more than $1,300 per year. If congressional Republicans get their way and repeal the law, more than 1.4 million Medicare beneficiaries will pay more each year — thousands of dollars more in some cases — for pharmacy drugs.
Drugmakers have raised insulin prices so quickly over the past few decades that some Medicare beneficiaries struggle to afford the life-saving drug, which costs less than $10 a vial to make. Today, Medicare beneficiaries enroll in plans that must limit out-of-pocket insulin costs to no more than $35 a month per prescription, a protection they would lose if the law were repealed.
The Inflation Reduction Act saves 13 million Americans an average of about $800 a year on their health care premiums by continuing the improvements to the Affordable Care Act (ACA) premium tax credits introduced in the American Rescue Plan. By making health care more affordable, these improvements extended coverage to millions of people, helping to reduce the uninsured rate to an all-time low. Starting today, during the open enrollment season, Americans can choose health insurance plans that lock in cost savings from the Inflation Relief Act of 2023. But Republicans in Congress will roll back that help, raise premiums and threaten the progress made by the Biden administration in driving the uninsured rate to historic lows. Older Americans will see particularly big premium jumps; in most states, annual premiums for a 60-year-old earning $60,000 would more than double to $10,000.