Consumer Coalition Urges Congress to Deny Obama Tax Raid of Medicare Part D

Published August 11, 2016

A coalition of 26 pro-consumer, pro-patient organizations is asking Congress to reject a “de facto tax increase on America’s seniors,” which President Barack Obama’s 2017 budget proposal characterizes as a “rebate.”

Obama’s budget would force drug companies to sell to Medicare at prices far below the market rate other customers pay, the letter states.

“The budget would also require pharmaceutical companies to ‘rebate’ up to 40 percent of their drug sales back to Medicare,” the coalition wrote in a June 21 letter to Congress. “This is not a ‘rebate’ in any true sense of the word. Rather, this is an attempt to force drug makers to sell to insurance companies at a loss, as the government does with the poorly-performing Medicaid program. Government forcing companies to turn money over to the Treasury is not a rebate, it’s a tax.”

If Congress approves Obama’s request, drug companies and insurers will pass the cost of the tax on to seniors in the form of higher prices, the letter states.

Additionally, Obama’s requested budget would permit the federal government to interfere with negotiations between insurers and pharmaceutical companies, reversing the free-market mechanisms that have caused Medicare Part D to cost 45 percent less than originally projected, the letter says.

Raid on Seniors’ Medicine

Signers of the open letter include Americans for Prosperity (AFP), Competitive Enterprise Institute, The Heartland Institute, which publishes Health Care News, and 23 other organizations.

Chrissy Harbin, director of federal affairs and strategic initiatives for AFP, says Obama’s proposal would plunder a relatively successful government program to pay for fiscally irresponsible activities.

“Our goal is to oppose government efforts to raid the Medicare Part D program in order to fuel higher spending elsewhere,” Harbin said. “Over the past seven years of the Obama administration, Americans have seen firsthand how our reckless spending has stagnated wages, limited economic freedom, and saddled future generations with debt. Raiding government programs in order to pay for higher spending elsewhere is problematic.”

Michael McGrady ([email protected]) writes from Colorado Springs, Colorado.

Internet Info:

“Coalition of 26 Groups to Congress: Oppose Medicare Part D Rebate Proposals,” June 21, 2016:

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