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The Goodman Institute Health Blog

Cuts to Medicare in the IRA Bill

Posted on November 22, 2022November 22, 2022 by John C. Goodman

Writing in the WSJ, Casey Mulligan and Tomas Philipson point out something that almost all commentary has overlooked. Seniors are about to be hit with a double whammy: higher drug prices at the pharmacy and higher premiums for Part D drug insurance:

We estimate that beginning in 2025, plan subsidies—specifically, the reinsurance subsidies for the beneficiaries with the most drug spending—will be cut $30 billion, out of revenue that currently totals about $110 billion. With $30 billion less to finance prescription benefits, something will have to give. Plans currently have far too little profit to span the chasm that the Inflation Reduction Act opens between expenses and revenue…

This is a nice companion to the article Linda Gorman and I wrote for The Hill a few weeks ago.

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For many years, our health care blog was the only free enterprise health policy blog on the internet. Then, when the NCPA closed its doors, the health blog stopped as well.

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