A Counter To Claims That Extending Medicaid Drug Rebates Would Help Reduce Deficit
Politico Pro: Study: Drug Rebates Would Drive Costs UpRep. Henry Waxman and Sen. Jay Rockefeller have introduced legislation that would extend Medicaid rebates to "dual eligibles" and those who qualify for the low-income subsidy program - a plan they say could reduce the deficit by $112 billion over the next ten years. But there's no such thing as a free lunch, said American Action Forum President and former CBO Director Douglas Holtz-Eakin, who is out with a new report Thursday that says providing these rebates could raise Part D premiums by as much as 40 percent. The report argues that if drug plans are obligated to pay subsidies for these low-income beneficiaries, they might make up the difference by reducing privately negotiated subsidies for better-off beneficiaries, which would result in increased premiums. Drugmakers could also potentially shift drug costs to the private insurance market (Nocera, 7/20). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.