About a quarter of American adults use Medicare, so any big changes to the program are of interest to pretty much the entire country. As it turns out, there are some really big changes coming soon, and when we say big we mean big like Swiftie level big.
Here are Five Fast Facts on upcoming price changes to Medicare:
- 🦸 Noble Intentions - In an effort to reduce the cost of prescription drugs for seniors, the 2022 Inflation Reduction Act included a $2,000 cap on out-of-pocket drug costs. Love it, sounds great. Government setting prices nice and low always works, right?
- 🤔 Unintended Consequences, Part 1 - Just two little problems. First, the costs beyond that cap are now being paid by the insurance companies. As a completely predictable and foreseeable result, they have started reducing the number and quality of the plans they are offering…and increasing the premiums of those they do still have!
- 🤔🤔 Unintended Consequences, Part 2 - The second problem with the cap is that drug prices – like literally everything else – have gone up by about 57% due largely to inflation. So, drug prices are pretty much in a sandwich with forces on both sides pushing upward.
- 🩹 Infected Band-Aid - To try to slap a Band-Aid on the situation, the government is now proposing giving $15 per customer to health insurance companies in exchange for being able to dictate a limit on how much they can increase premium prices. It’ll cost taxpayers $5 billion in the first year alone, and go up from there! Naturally.
- 😣 Bad Things - It’s bad enough that the government’s own poor choices are driving up costs for Medicare, but their proposed solution would set a terrible precedent of artificially setting Medicare prices every election year in the future, and letting taxpayers foot the bill. Um, no thanks.
🔥Bottom line: This is entry #4,532,861 in the book of unintended consequences that were completely expected. The government can’t simply (translation: magically) enforce price controls. It doesn’t work, ever, in any case. If you slap a cap over here, the extra cost has to come from somewhere. It’s unfortunate that they’re playing fast and loose with something like Medicare, though, that so many people rely on for such an important thing! And will this one survive the legal wrangling that is sure to come? We'll see.
What do you think about this?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
Btw, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
