The inflationary spiral that drove prices up during the first years of the Biden administration has ended. That’s the good news. The bad news is we’re still paying more for too many things even as real wages underwent a prolonged decline.
To help people buy more with less, Joe Biden appears to have embraced price controls.
That shouldn’t be a revelation. Buried inside the Inflation Reduction Act is a provision that created a pathway for the government to secure lower prices for certain prescription drugs covered under Medicare. It’s controversial. Many economists and the pharmaceutical industry say fewer quality-of-life-improving drugs will be produced because of it. Nonetheless, the Biden administration has continued to move towards its implementation.
Those who are old enough to remember the Nixon years know that government-imposed price controls don’t work. Seniors who are hoping the Biden initiative will reduce what they pay for the drugs they need are in for disappointment. Instead of alleviating their financial concerns, the administration’s scheme will add to them.
It doesn’t have to be that way. In a rational world, adopting a plan that will undoubtedly produce scarcity, higher prices (resulting from a new excise tax on certain targeted drugs), and lead Medicare to determine it should cover fewer rather than more prescription pharmaceuticals would be dismissed out-of-hand. Yet that’s what the president’s plan will do.
There are better ways. Under George W. Bush, America’s seniors benefited through the introduction of Medicare Part D, which allows them to pay for prescription drugs through private insurance purchased with government assistance. Most of the expense was borne by the new program, reducing the amount seniors needed to pay out-of-pocket to get their prescriptions filled.
It worked better than most analysts and economists projected it would. Biden, it seems, is ready to undo that progress and reverse direction through a program sold to the American people as one that merely authorizes the federal agency that oversees Medicare and Medicaid to “negotiate” on price with drug manufacturers.
Copyright 2024 Peter Roff distributed by Cagle Cartoons newspaper syndicate.