AEI economist Benedic N. Ippolito testified before the Senate HELP Committee on the Lower Health Care Costs Act. Ippolito applauded the bipartisan effort to “meaningfully increase competition and transparency in health care markets…lowering costs would also improve access to health care.”
Senate HELP Committee leaders Wednesday unveiled their wide-ranging bill to address health care costs including “surprise” medical bills. [While surprise medical bills are a serious problem and the goal is laudable, Congress has tried in the past to address this issue, leading to unintended and expensive consequences. All of the proposals before the HELP committee are controversial, and Congress must proceed carefully to avoid exacerbating the problem.]
While Washington debates whether the “rebate rule” proposed by the Trump administration would cause federal spending to rise, too many are forgetting the people it would help. The rebate rule would convert rebates on brand-name prescription drugs—paid by pharmaceutical companies to health insurance plans—into upfront discounts—shared directly with patients at the pharmacy. The rule affects seniors and low-income Americans in privately run Medicare and Medicaid plans, but the administration wants Congress to extend the same protection to all Americans with private insurance. This is the quickest way to lower consumers’ out-of-pocket costs for medicines—by billions each year. It’s also a once-in-a-generation opportunity to reset our system to work better, for all patients.