Older adults will likely shell out more for healthcare costs in 2022. Medicare beneficiaries will see their premiums for 'Part B,' which covers doctor and urgent-care visits, increase by more than 14%, on top of increasing prescription drug prices.
Richard Frank, senior fellow in economic studies at the Brookings Institution, explained a provision outlined in President Joe Biden's Build Back Better Act would penalize companies for raising their prices faster than overall economic growth.
It is a change he believes would help rein in companies' price hikes and save people money.
"We can save a lot of money on drugs that don't add that much to our therapeutic arsenal, and continue to reward the drugs that do," Frank asserted.
Pharmaceutical companies argued a limit on prices would stifle innovation, slowing the discovery of new cures for diseases, but there is evidence Medicare recipients who see hikes in their pharmacy bills are less likely to fill prescriptions, and skipping refills is linked to around a 33% increase in deaths, according to a study by the National Bureau of Economic Research.
A survey by the group Small Business for America's Future found lowering healthcare and prescription costs for employees is a top priority for small business owners.
Frank pointed out drug costs have far surpassed inflation, and are hitting consumers and small businesses at a time when the pandemic has further increased healthcare costs.
"So, for the last several years, prices have been going up for prescription drugs at a rate that is around three times that of inflation," Frank noted.
The Build Back Better Act would allow the government to negotiate prices with drug companies for certain drugs covered under Medicare Parts 'B' and 'D,' but the bill stalled in the U.S. Senate in December.