Pallone Hails the Inflation Reduction Act

Pallone

WOODBRIDGE – Frank Pallone comes across as a low-key guy.

But he was feeling pretty chipper today, or as he put it:

“I really can’t be enthusiastic enough.”

Pallone, who has been in Congress since the late 1980’s, was celebrating at a local senior center the imminent passage of a bill that allows Medicare to negotiate prescription drug prices.

That provision is part of the grandly-called Inflation Reduction Act and the House is set to pass it tomorrow; it passed the Senate last Sunday.

Pallone called the concept the most significant health-related bill during his time in Congress with the possible exception of the Affordable Care Act.

He recalled when a prescription benefit was first established for Medicare in 2003, Republicans insisted that Medicare not be allowed to negotiate drug prices.

“It was just a give away to the drug companies,” Pallone said.

Democrats, who have tried to allow negotiations since then, are about to finally succeed.

The premise is simple. As the prime insurer for most seniors, Medicare buys an enormous amount of prescription drugs. So it will be able to use that power to drive down costs.

But not yet.

Government moves slowly and this negotiation power won’t kick in until 2026 and only 10 drugs will be affected. That number will rise in subsequent years.

Some critics have noted that this bill only impacts drugs purchased by Medicare, but Pallone had an answer.

He speculated that if Medicare negotiations are able to reduce prices, private health insurance companies can be counted on to demand the same benefit. After all, they’re pretty powerful outfits as well.

“The bottom line is the insurance companies are not stupid,” Pallone observed.

He also pointed out other benefits for seniors such as capping out of pocket drug costs at $2,000 a year starting in 2025 and insulin at $35 a month beginning next year. Insulin costs were politically controversial in the Senate. The $35 cap is included only for Medicare patients. Republicans opposed imposing the monthly cap on private insurers.

Pallone tried – somewhat – to avoid playing politics. But it is clear that Democrats are convinced the health benefits being created are going to help them in November, bringing up perhaps the old line that “good policy is good politics.”

Pallone didn’t go that far, but he said, “This is really so significant.”

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