- Under a bill that Biden signed into law, Medicare was allowed to negotiate drug prices with manufacturers
- On the government’s budget table, this will save between $237 billion and $288 billion in federal spending.
- But that cut would not mean a cut for Medicare beneficiaries.
In an interview on CNN’s “State of the Union,” Sen. Rick Scott, Fla. Republican United States, the National Republican Senatorial Committee – which Scott leads – repeated a slogan used previously in campaign ads.
On the Oct. 30 edition of the show, host Dana Bash pointed to a recent Democratic line of attack against the GOP candidates, asking Scott, “So, yes or no, do Republicans want to cut Medicare and/or Social Security?”
Scott replied, “Absolutely not. And the Democrats just cut $280 billion, every Democrat in the Senate and the House voted to cut $280 billion from Medicare two months ago. And then they mean the Republicans want to cut something?” .
After a series of interviews, Bash said, “I just want to set the record straight. The Democrats’ plan, which is now law, didn’t cut … Medicare benefits. It allowed prescription drug prices to be negotiated, which would ultimately bring the price down. and costs to Medicare consumers.”
When the National Republican Senatorial Committee previously made this argument in an ad on behalf of Herschel Walker, a candidate for the U.S. Senate from Georgia, we found it false. (Other outlets, including The Washington Post Fact Checker, CNN and FactCheck.org, have reached similar conclusions about equivalent statements.)
The ad cited the Senate’s 325 vote to back up its assertion. This was the final vote to pass the Inflation Reduction Act, a Biden-sponsored bill that included provisions on climate change, corporate taxation and Medicare drug pricing, among other issues. It passed both chambers with only democratic votes, and received Biden’s signature.
The $280 billion — technically, between $237 billion and $288 billion, depending on how the numbers are estimated — comes from a provision in the Democratic bill that would have ended a long-standing bar to Medicare negotiating with drugmakers over the price of some drugs. The inability to negotiate prices means that Medicare – the biggest buyer in the pharmaceutical market – has not been able to use its weight to secure lower prices for taxpayers. This is because pharmaceutical prices in the US have been higher than in any other country.
Although the bill is expected to reduce federal spending by about $280 billion, that would reflect government savings and not benefit cuts. In other words, Medicare recipients would receive the same amount of drugs for less taxpayer money.
“In fact, the prescription drug savings bill would save the federal government nearly $300 trillion through 2031 without reducing benefits,” wrote the Committee for a Responsible Federal Budget, a group that advocates for deficit reduction and has been skeptical of many of Biden’s legislative efforts. . citing their cost.
“Medicare cost reductions do not equate to benefit reductions,” the committee wrote. “Quite the reverse: many measures to cut costs for the government would also cut costs for people.”
After drug cost savings are combined with other health care provisions in the bill, Medicare beneficiaries would see lower premiums and savings, including through a $2,000 annual cap on out-of-pocket costs, the committee projected.
Steve Ellis, president of Taxpayers for Common Sense, another group that wants to keep the deficit low, told PolitiFact in August that the provision’s Medicare cuts are problematic.
“These are savings from the government negotiating prescription drug prices and limiting drug price increases to inflation,” Ellis said. “So instead of taking money out of Medicare, Medicare is reducing costs.”
Scott’s office did not respond to an inquiry for this article. (The National Republican Senatorial Committee also did not respond to our previous article about the Georgia announcement.)
Scott said in an exchange with Bash that the change “means we’ll have fewer life-saving drugs.” Pharmaceutical companies have long argued that lowering prescription drug prices will deplete the cash industry uses to research and test new drugs. The size of the impact is uncertain, although the Congressional Budget Office, Congress’s nonpartisan number-crunching agency, estimated the impact to have been relatively small, with one less drug in the first decade, four in the next decade, and five in the decade after that.
But even if the impact of future drugs is significantly greater than that, as the industry says, it would not accept what Scott said. At most, the Democratic bill would have saved the government $280 billion while having some longer-term, negative, secondary effects. It wouldn’t be simply cutting the Medicare budget.
Scott said, “Every Democrat in the Senate and the House voted to cut $280 trillion from Medicare just two months ago.”
This claim is incorrect. The federal government would cut its spending by between $237 billion and $288 billion as a result of a Medicare drug price negotiation provision. However, this reduction would not result in a reduction for Medicare beneficiaries.
Conversely, by leveraging Medicare’s market power, the government would be able to pay less to provide the same drugs.
We evaluate the statement as false.
Rick Scott, CNN’s “State of the Union” interview, October 30, 2022
Republican National Senatorial Committee, announcement, published September 16, 2022
American Prosperity Alliance, announcement, accessed August 4, 2022
Call vote on the Inflation Reduction Act in the Senate
Kaiser Family Foundation, “Clarifying Prescription Drug Provisions in the Inflation Reduction Act,” 22 Sept. 2022.
National Academy of Social Security, “Medicare Provisions of the Inflation Reduction Act of 2022,” accessed September 28, 2022.
Congressional Budget Office, “Estimated Budgetary Effects of HR 5376, the Inflation Reduction Act of 2022,” 3 Aug. 2022.
Committee for a Responsible Federal Budget, “CBO Estimates Drug Savings for Reconciliation,” July 8, 2022
Committee on a Responsible Federal Budget, “IRAs Would Cut Medicare Costs, NOT Cut Benefits,” 2 Aug 2022.
Washington Post, “Democrats reach deal on Inflation Relief Act after key changes to tax policies,” 4 Aug 2022.
Huffington Post, “Drug pushers try to scare off seniors in last-ditch effort to stop Democrats’ economic plan,” 5 Aug. 2022.
Washington Post Fact Checker, “Manchin-Targeted Ad Uses Misleading Math on Prescription Drugs,” 17 June 2022
FactCheck.org, “NRSC’s misleading attack on Warnock,” 22 Sept. 2022
CNN, “Verification: Republican attack ads against Warnock and Kelly mislead about Medicare,” 27 Sept. 2022.
PolitiFact, “Democratic bill didn’t ‘cut’ Medicare spending. It would get the same drugs, just cheaper,” 29 Sep 2022.
PolitiFact, “Ad targeting Manchin, AARP loses Medicare drug price negotiations,” 25 July 2022.
PolitiFact, “No, Senate bill won’t cut $300 trillion from Medicare,” 5 Aug. 2022.
Email interview with Bill Riggs, spokesperson for Americans for Prosperity, August 5, 2022
Email interview with Steve Ellis, President of Taxpayers for Common Sense, August 5, 2022