A recent report by Americans for Limited Government alleges that President Joe Biden’s repeal of a Trump-era drug rebate rule has resulted in higher healthcare costs for seniors, while redirecting funds towards electric vehicle (EV) tax credits, benefiting Chinese manufacturers.
In 2020, former President Donald Trump introduced a policy aimed at reducing prescription drug costs for seniors enrolled in Medicare Part D. The Trump Rebate Rule sought to allow seniors to benefit directly from the rebates that drug manufacturers pay to pharmacy benefit managers (PBMs) for preferred placement on drug formularies. Trump asserted that this policy would save American seniors billions of dollars by eliminating middlemen and lowering prescription prices.
“This rule will save American seniors billions of dollars by preventing middlemen from ripping off Medicare patients with high prescription prices,” Trump said at the time. “Today’s action ends this injustice and requires that these discounts go directly to the people who need it.”
Despite expressing public criticism of PBMs, the Biden administration ultimately repealed the Trump Rebate Rule. This move came after PBMs filed a lawsuit against the rule, and the administration decided to wait for the court’s decision rather than implement the policy.
Critics argue that the Biden administration’s decision was politically motivated, aiming to prevent Trump from claiming a policy victory in his re-election campaign. This theory gained traction following the passage of the Inflation Reduction Act (IRA), which repealed the Trump drug rebate rule. The IRA, a signature piece of Biden’s domestic agenda, has faced criticism for contributing to inflation while failing to deliver promised economic benefits.
The report from Americans for Limited Government highlights that premiums for the 50 million Americans enrolled in Medicare Part D have increased by over 20% this year and are projected to rise another 50% in 2025. The repeal of the rebate rule has been cited as a factor in these rising costs, which have placed additional financial strain on seniors.
Adding to the controversy, the report points out that the IRA allocated $300 billion in tax credits for electric vehicles, with a significant portion potentially benefiting Chinese manufacturers. Critics argue that this funding should have been used to support American seniors instead of subsidizing foreign companies.
“Seniors have been particularly harmed by the economic damage of the last three years,” the report states. “Inflation erodes the life savings of those on fixed incomes who struggle to pay for groceries or other necessities. They have paid their entire lives into the Medicare system that was supposed to be there to take care of them.”
The Biden administration’s stance has been to promote the IRA as a means to combat climate change and support green energy initiatives. However, opponents argue that this has come at the expense of vulnerable populations, particularly seniors who rely on Medicare.
In a proclamation addressing elder abuse, the Biden White House emphasized the importance of protecting older Americans and improving the nation’s response to elder exploitation. Critics, however, have called for more concrete actions to ensure that Medicare remains a robust support system for seniors.
As the debate continues, former President Trump has indicated that he would reinstate the rebate rule if re-elected, promising to deliver financial relief to seniors and reduce prescription drug costs.
The discussion over healthcare policy and economic priorities remains a contentious issue as the nation approaches the upcoming election, with significant implications for millions of Americans.
