Inflation Reduction Act's Needless Health-Care Provisions

The House of Representatives will soon take up the Inflation Reduction Act

• The bill will do little to control inflation and will harm Americans in order to fund an expansion of government-run health care that disproportionately benefits the wealthy and leads to inflation and provides inferior care.
• The highly regarded Penn-Wharton Budget Model estimated that the impact of the IRA on inflation over the next ten years would be "statistically indistinguishable from zero."

The drug-price provisions empower the secretary of Health and Human Services (HHS) to "negotiate" the prices of some high-expenditure, single-source Medicare drugs.

• But this will not be a negotiation in the usual sense of the word
• The secretary is the sole arbiter of which drugs will be negotiation-eligible
• If a company refuses to negotiate or doesn't agree to the price HHS sets, it will be subjected to a confiscatory excise tax of up to 95 percent of sales of the drug.

The second category of health-care provisions in the IRA is a three-year extension of expanded Affordable Care Act subsidies, due to expire at the end of 2022.

• The ACA provided subsidies, primarily through premium tax credits, to people with incomes between 100% and 400% of the federal poverty level (FPL) and limited the amount a person could pay for a benchmark insurance exchange plan to a percentage of their income-a fraction that increased with rising incomes-with subsidies paying the difference.
• The March 2021 American Rescue Plan boosted subsidies for people who were already eligible by lowering the maximum percent of income they were responsible for, and it expanded eligibility by eliminating the upper income limit of 400 percent of the FPL.
• Eliminating the upper-income limit ensured that the greatest benefit-reduced net premiums-went to people who are older and therefore had higher premiums, or people living in areas with higher premiums.
• These expanded subsidies amount to welfare for the wealthy.

The Inflation Reduction Act is an attempt to expand government control over medical care

• It will not reduce inflation but will harm Americans by reducing pharmaceutical R&D, resulting in fewer lifesaving, innovative drugs-and thus, reduced life expectancy and quality of life.
• It will also perpetuate an unnecessary, inflationary expansion of ACA subsidies that primarily benefit the wealthy.

The House of Representatives should reject this destructive legislation.

• Joel Zinberg, M.D, Ph.D., J.D. is a senior fellow at the Competitive Enterprise Institute, an associate clinical professor of surgery at the Icahn Mount Sinai School of Medicine in New York, and the director of Paragon Health Institute's Public Health and American Well-being Initiative.

https://www.city-journal.org/inflation-reduction-act-needless-health-care-provisions