Today, the House Oversight Committee is holding an important hearing entitled "The Role of Pharmacy…
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House Hearing Spotlights Pharmacy Benefit Managers (PBMs) as Drivers of Higher Drug Prices

Today, the House Oversight Committee is holding an important hearing entitled "The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part III:  Transparency and Accountability."

For those unfamiliar, Pharmacy Benefit Managers (PBMs) amount to middlemen that control prescription drugs for millions of Americans.  A majority of Americans receive health insurance through employer plans or government programs such as Medicare, which in turn cover prescription drugs through PBMs.  Those PBMs negotiate with drug companies and pay pharmacies, but throughout the process determine the drugs that insured patients may obtain and at what cost.

The problem is that PBMs operate in such an opaque and complex manner that they're able to inflate drug costs while claiming to be working…[more]

July 23, 2024 • 04:57 PM

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Going Deeper on Krauthammer’s Plan to Repeal ObamaCare Print
By Ashton Ellis
Wednesday, November 12 2014
What follows is a closer look at what each repeal idea would accomplish if implemented.

After the Republican wave washed over Congress last week, Washington Post columnist Charles Krauthammer had several pieces of advice for the new GOP majority. He advocated bold and continuous legislative actions that would put Democrats on the defensive. Those include measures with sizeable Democratic support such as authorizing the Keystone XL pipeline, fast-track authority for stagnant trade negotiation bills and a measure to repatriate more than $2 trillion in assets held overseas by U.S. corporations.

Then Krauthammer went big:

"As for ObamaCare, a symbolic abolition that Obama will immediately veto is less important than multiple rapid-fire measures to kill it with a thousand cuts. Repeal of the medical device tax. Repeal of the individual mandate. Repeal of the employer mandate. Repeal of the coverage mandate, thereby reinstating Obama’s broken promise that 'If you like your health-care plan, you can keep it.' And repeal of the federal bailout for insurers on the ObamaCare exchanges. 
 "If Obama issues vetoes, fine. Let the Democrats defend them for the next two years."

Thereafter, Krauthammer moved on to other memo items like cautioning Republicans against President Barack Obama’s impeachment baiting should he follow through with threats to grant amnesty to millions of illegal immigrants via unilateral executive action.

But Dr. K’s prescriptions for terminating ObamaCare deserve further consideration. (Before he was a Pulitzer Prize-winning columnist, Krauthammer practiced as a Harvard-trained psychiatrist.)

What follows is a closer look at what each repeal idea would accomplish if implemented.

Repeal of the Medical Device Tax

Repealing the medical tax would starve ObamaCare of funding. The tax is designed to net upwards of $30 billion for the federal treasury by slapping an extra 2.3% excise tax on every medical device sold. The idea is to hide the fact that ObamaCare raises health care costs by shifting the financial burden onto device manufacturers. At least two Democratic Senators – Al Franken and Amy Klobuchar of Minnesota – are on record supporting repeal since the tax negatively impacts in-state businesses. Other Democrats in states or districts with medical device makers are also eager to get rid of a tax that could result in 43,000 lost jobs, not to mention the additional costs to patients who use a wide-ranging array of such medical devices.

Repeal of the Individual Mandate

Eliminating the individual mandate would likely kill ObamaCare. Without financial penalties being levied against people who refuse to buy health insurance, insurance companies would refuse to participate on ObamaCare exchanges with their profit-shrinking coverage mandates and price controls. Liberating Americans from forced insurance would not only restore personal freedom, it would also reduce the budget deficit. Yes, eliminating the individual mandate would “cost” the government $27 billion over ten years. But it would also save taxpayers well over $200 billion in ObamaCare-related spending. Getting rid of the motor that drives ObamaCare also scraps the maintenance costs.

Repeal of the Employer Mandate

The employer mandate is wreaking havoc not only on small businesses, but also government regulators. It’s been delayed at least three times because of the complexity of making it work. For example, the mandate applies to any business with 50 or more full-time employees. ObamaCare defines full-time as working 30 hours or more a week, meaning any employee at or above this level must be offered employer-provided health insurance.

By creating the 50/30 threshold, ObamaCare effectively imposes a tax on business development. This hits small businesses particularly hard since many rely on flexible staffing arrangements to stay afloat. If forced to choose between losing money if they hire more people, or deliberately refusing new ventures to stay under the threshold, many small business owners will (reluctantly) choose to stay small. That hurts workers as well, many through having to work reduced hours, others through lost job opportunities.

Repeal of the Coverage Mandate

The coverage mandate is the requirement that all health insurance plans comply with certain minimal service bundles. Readers may remember – or have experienced – reports of the millions of canceled insurance policies in the individual market that presaged ObamaCare’s first enrollment period. These cancellations gave the lie to President Obama’s oft-captured promise that, “If you like your health-care plan you can keep your plan.”

Eliminating ObamaCare’s coverage requirements would allow consumers to repurchase health care plans they prefer, at prices that are unencumbered by needless services – such as maternity-related care in a plan sold to a single man. 

Repeal of the Federal Bailout for Insurers on the ObamaCare Exchanges

Finally, there is a growing chorus to repeal the little-known federal bailout for insurance companies participating in ObamaCare exchanges. This is a complicated three-part scheme that boils down to a statutory promise by the Obama administration to act as a financial backstop if insurers lose more than a specified percentage on their ObamaCare clients.

Ending this taxpayer-financed bailout program sooner rather than later is actually a service to the insurance industry. Why? Because, as written, ObamaCare phases out the bailout provisions by the time Obama leaves office. Initially, this was done because the law’s drafters thought all of ObamaCare’s provisions would be implemented as intended, meaning that within three years of going live all of the market disruptions unleashed by the various mandates would settle down enough to make the bailouts unnecessary. But then political reality hit, and the delays started occurring. Now, not even the insurance companies that are banking on the bailout can be sure that three years will be enough.

Like the rest of ObamaCare’s mandates and taxes, it’s better to axe the bailout now and have certainty about the future, than let the regulatory mess persist.

The sooner Republicans in Congress can pass laws and explain these points to the American people, the sooner we can all turn our attention to health reform ideas that are honestly and straightforwardly presented, and stand a chance of actually working as intended.

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