Big Government will not lower healthcare costs
Ann Marie Buerkle
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The majority of people report that they’re struggling with inflation, and there’s little doubt it will be a consistent concern throughout the 2024 elections. Every legislator is rightfully hearing this message from constituents.
Republicans, especially, have highlighted the harmful effects of inflation as part of their pitch to voters as to why they should be back in power. They’ve correctly argued that government spending and burdensome regulations under President Joe Biden, particularly in the energy industry, are the root cause of the inflation.
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But one aspect of inflation that doesn’t get as much attention from the GOP is “healthcare inflation.” That’s a significant oversight.
A new analysis estimates a $370 billion increase in U.S. health expenses by 2027, which will ultimately have a devastating effect on households. Higher healthcare costs mean higher insurance premiums, which are borne by employers who provide their people with health insurance benefits. Employers have to decide whether to pass along those costs to their employees, effectively lowering their wages, or hire fewer workers. One way or another, healthcare inflation affects us all.
This is why, after we learned the “red tsunami” was more of a “red ripple,” I wrote that Republicans need a healthcare affordability agenda. We can’t continue avoiding the healthcare topic. I also proposed a Republican litmus test for evaluating healthcare policies: Only support healthcare policies that empower the private sector to lower healthcare costs. The rest? Throw them out.
One piece of legislation Republicans should cast aside is S.127, the PBM Transparency Act, which was introduced in the Senate last week. This bill includes policies that Republicans normally hate, such as granting the federal government the power to overregulate private industry, which results in higher consumer costs. Inexplicably, some Republicans supported it last year.
At the heart of the bill is an industry fight between drug companies, pharmacies, and a little-known sector of healthcare firms called pharmacy benefit managers. While not many people have heard of PBMs, everyone relies on them since they negotiate drug discounts and contracts with pharmacies on behalf of governments, employers, unions, and health plans.
So, if you have some form of insurance, you probably have a PBM working on your behalf to lower your pharmacy costs and review your prescriptions to make sure they’re safe for you to take. PBMs save $1,000 in healthcare costs per person per year and through their coordination of prescriptions, prevent nearly a half-million heart failures that would’ve occurred through harmful drug interactions.
Lowering drug costs and improving patient outcomes should not be controversial. So why is there a fight? PBMs are the only part of the drug supply chain with a financial incentive to lower healthcare costs.
Consequently, drug companies and pharmacies view PBMs as obstacles to higher profits. And so, they’ve requested policymakers deploy protectionist policies to shield them from PBMs’ cost-saving tactics.
That’s the purpose of this bill — to strip away tools PBMs use to lower healthcare costs for their clients.
It’s also worth pointing out how the bill works. It doesn’t just regulate PBMs — it also grants far-left progressive activists at the Federal Trade Commission like Lina Khan unbridled authority over the drug supply chain. Not only is this harmful to the future affordability of the healthcare industry, it sets a dangerous precedent for the FTC to regulate prices and business practices in virtually any industry.
Not all Republicans have embraced this legislation. When it was considered in the Senate Commerce Committee last year, eight conservative Republicans stood up to defend the private market from this big government attack: Sens. Cynthia Lummis, Rick Scott, Ron Johnson, Mike Lee, Todd Young, Marsha Blackburn, Ted Cruz, and Roy Blunt. Fortunately, Cruz is the ranking Republican on the committee this year, and I hope he can convince more of his colleagues to stand up for conservative principles and oppose this bill. After all, regulating PBMs is not the type of healthcare agenda Republicans should embrace.
I encourage my fellow conservatives to follow the lead of these eight senators and pursue healthcare policies that empower the private market to lower costs through more competition, not rely on government regulation. The market works best when it’s free and competitive. When the government gets involved, costs go up and quality goes down.
Conservatives understand that when the government puts its thumb on the scale in favor of a particular industry, the consumer is always the loser. As a nurse, this issue is of particular importance to me because, in this instance, consumers are patients. They are our loved ones, and the stakes are nothing less than their health and well-being.
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Former Rep. Ann Marie Buerkle (R-NY) is a nurse and attorney who represented New York’s 25th Congressional District.