Senate Finance Must Reject Socialist “Solutions”

The U.S. Senate Finance Committee has scheduled a hearing ahead of Republican leadership’s fulfilling a deal with Democrats—a vote on Democrats’ Obamacare premium subsidies in exchange for a handful of votes by senators from the minority side to proceed with legislation to fund the government and finally end the Democrats’ heartless federal shutdown of nearly a month and a half.

The November 19 hearing, titled “The Rising Cost of Health Care: Considering Meaningful Solutions for all Americans,” holds the potential for health reforms that benefit patients, taxpayers, employers, health care providers and others in the U.S. health care ecosystem.

There are some grownups on both sides of the aisle in this committee. But the rosters include senators of each party who don’t value the art of legislating, but make up for that with blind ideology, either of the socialist Left or the populist Right.

The Democrats will likely march lockstep behind rescuing the expiring government handouts. Their “plan” is to continue Obamacare premium subsidies for people well into the upper middle class and others who shouldn’t qualify. Or worse.

Most Republicans will probably lean toward free-market-based solutions. That would be great, if they inject more consumer choice and competition into a highly regulated sector of the economy.

A good start would be to expand use of and access to health savings accounts. HSAs empower consumers to behave like consumers—comparing the value, cost and quality of medical goods and services, just as they do when buying other types of goods and services. The HSA provisions of the One Big, Beautiful Bill Act are a good first step. But properly amended, HSAs have the potential to enable consumers to move the needle significantly toward constrained costs, better quality care and greater value for the health care dollar.

Another free-market solution would empower patients and medical professionals with greater market power. Rent-seeking middlemen, such as pharmacy benefit managers and insurers, should undergo reforms that benefit the rightful decisionmakers (i.e., docs and patients). PBMs should no longer be able to game formularies to collect higher fees or keep manufacturer discounts that ought to help reduce patients’ out-of-pocket costs. And insurers’ barriers to patient-doctor decisions, such as prior authorizations, should be addressed.

Biden-era socialist price controls are contained in the Inflation Reduction Act. Those radical policies, which include the extortionary 95% excise tax on drugs and the “pill penalty,” continue to raise Medicare premiums, reduce coverage options and advantage China’s growing competitiveness in such areas as biotech and pharmaceutical innovation. One necessary, market-based solution is the Ensuring Pathways to Innovative Cures (EPIC) Act.

Other low-hanging health policy fruit that would clean up waste, fraud and abuse, reverse the Obama-era Affordable Care Act’s irresponsible expansion of 340B-eligible facilities, improve charity care for the truly needy indigent and help rural hospitals is 340B reform. The Congressional Budget Office finds that spending in this program grew from 2010-2021 about sevenfold. The 340B ACCESS Act would be a great place to start in fixing this problem.

Finally, in the “first, do no harm” category, the committee must soundly reject any type  of government price controls, including importation of “most favored nation” foreign drug price controls. Adopting any form of price controls—particularly on biopharmaceuticals, one of America’s critical and emerging technologies—would cement in the law of the United States social democracy’s means of undermining economic liberty. This would be unconscionable and disastrous.

Remember what conservative intellectual Michael Novak said: “Social democracy is based on the same errors as socialism, but in a form that takes a little longer to effect self-destruction.”