The fiscal cliff agreement fell far short of raising the revenue needed to address the budget deficit in Washington. The debate in Congress now appears to be shifting to a more single-minded focus on cuts and will become more intense in the next few months. A lot more than numbers is at stake — health care for millions of middle- and low-income Americans, tens of thousands in Maryland alone, hangs in the balance.
At the heart of the battle will be whether to increase revenue or slash critical programs. If Congress caves into the radicalism of House Republicans on vital programs like Medicaid and Medicare, we will all pay the price.
Cutting these programs would lead to lost nursing home care, lost asthma medication and lost breast cancer treatment. Disproportionately, those hurt will be people of color. But these cuts would harm everyone, because the loss of health care dollars also will mean the loss of jobs and stalled economic growth.
If House Republicans and other members of Congress really want to reduce health care costs, there are responsible alternatives. For example, let’s negotiate lower drug prices. Americans pay more for prescription drugs than people in any other industrialized nation. The Veterans Administration and Indian Health Service — not to mention every other developed country in the world — negotiate prescription drug prices. Yet, there are no negotiated drug prices for people with Medicare or those who qualify for both Medicare and Medicaid. In fact, the 2003 Medicare drug law expressly forbids the federal government from bargaining prescription drug prices for the nearly 50 million Medicare recipients.
Leveraging the mass purchasing power of Medicare would save far more than the amounts demanded by even the most ardent deficit hawk. According to the Center for Economic and Policy Research, if allowed to negotiate drug prices, the federal government would save as much as $541.3 billion over the next decade. Savings to the states could reach $72.7 billion, and beneficiaries would save $112.4 billion.
Sadly, pharmaceutical giants spend millions to preserve the status quo. In 2011, the top 10 drug companies alone took in over $43 billion in profits. With 32 million people entering the insurance market in 2014 thanks to health care reform, their profits will soar. Pharmaceutical companies spent nearly $153 million on lobbying in 2011; they employ 876 lobbyists, nearly two for each member of Congress, and they made $14.7 million in campaign contributions in the 2012 election cycle.
If lawmakers see no option other than cutting these programs, those cuts must come from reducing drug costs rather than raising the Medicare eligibility age or slashing Medicaid benefits.
These are more than just dollars-and-cents decisions. They are choices about who and what matters in our country. It’s time for members of Congress to show that they value all Americans, not just campaign donors and powerful interests.
Frank Stella is president of the Maryland/DC Alliance for Retired Americans, a nonprofit organization that says it represents more than 80,000 retirees.