Where cost savings go🤑

When you try and solve a single problem that involves many complex components, but you address only one of those components, others may be adversely affected. So it is with Medicare and private insurance. Medicare is only at its level of spending because of cost shifting to the private sector. The plan to lower the cost of prescription drugs is the latest example.

“Staub notes that while these savings are certainly necessary for those with Medicare plans, insurance companies will seek to regain those profits. “

“The simple reality is the U.S. government is telling pharmaceutical companies that they are no longer going to pay this high amount they’ve been charged,” he says. “That’s billions of dollars worth of revenue that pharmaceutical companies will want back. Those lost revenues will trickle down to insurance carriers and then employers.”

“In other words, pharmaceutical companies are likely to raise costs to recoup what they deem to be a loss in revenue previously filled by the government and Medicare beneficiaries. Employers may be left with little protection as insurance carriers pass on the price hike to group health plans, driving premiums up. And if an employer is already struggling with inflation and overhead, that added cost is coming out of employees’ paychecks.”

“Their employees are going to have to come up with the cost after not getting the proper raise to deal with inflation,” says Staub.

SOURCE: https://www.benefitnews.com/news/bidens-inflation-reduction-act-impact-on-health-insurance

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