Vice President Kamala Harris’s plan to cap the costs of prescription drugs has sparked concerns among healthcare analysts, who warn that it could lead to a significant increase in health insurance premiums.
Harris’s proposal, which aims to expand provisions of the Inflation Reduction Act, would impose a $35 per month cap on insulin costs for all healthcare plans, not just Medicare beneficiaries. Additionally, it would cap total annual spending on prescription drugs at $2,000 for all private healthcare plans, requiring insurance providers to cover any costs exceeding that amount.
However, experts predict that these policies would lead to higher health insurance premiums, with some estimates suggesting a substantial increase. Ed Haislmaier, a healthcare policy adviser at the Heritage Foundation, notes that the Inflation Reduction Act has already increased premiums, and Harris’s proposals would only exacerbate the problem.
According to Haislmaier, premiums for Medicare Part D supplemental insurance plans have increased by 46% since the passage of the Inflation Reduction Act in 2022, with the national average premium costing $6,098. Moreover, the number of Medicare Part D supplemental plans has decreased by 31% since 2021, leaving seniors with fewer options for coverage despite rising prices.
Matthew Rae, associate director of the healthcare marketplace program at KFF, acknowledges that Harris’s proposals could lead to higher premiums, but notes that it’s difficult to estimate the exact impact. However, he suggests that capping out-of-pocket expenses for prescriptions could encourage patients to take more medications than they need, leading to higher costs for insurers.
The proposal to cap insulin prices at $35 per month is expected to have a relatively small impact on premiums, according to Rae. However, Haislmaier argues that the problem of high insulin prices is not caused by manufacturers, but rather by pharmacy benefits managers (PBMs) who negotiate prices between insurance providers and drug companies.
With healthcare costs remaining a top issue for voters, Harris’s proposals are likely to be closely scrutinized in the lead-up to the 2024 election. While the affordability of healthcare is a major concern for both Republicans and Democrats, more people are worried about insurance premiums than prescription drug costs.
