Here is what Proposition 61 would do.
It would prohibit all state agencies from buying prescription medications at any price higher than the lowest price paid, for the same drug, by the US Department of Veterans Affairs. This rule would apply to drugs bought directly by the state agency, or when the agency is the ultimate payer for the medication, even if the agency does not directly buy the medication.
This sure seems like a good idea. According to the Non-Partisan Legislative Analyst’s Office (an agency housed in the state legislature) the state of California spent $3.8 billion on prescription medications in fiscal year 2014-2015. The savings to the state could be considerable, although the Legislative Analyst’s Office said it was unable to estimate just how much at this time.
So, why shouldn’t we vote for proposition 61?
The problem is that those savings are likely to come at the expense of the rest of us.
Almost certainly, the drug companies will compensate for this loss of income by charging more to everyone else.
Congress barred Medicare from negotiating drug prices. According to the US Centers for Medicare and Medicaid Services, in 2015, over 39 million Americans were enrolled in Medicare Part D. Part D is the program that helps seniors pay for prescription medications. Since Medicare can’t bargain on medication prices, it will pay more for drugs, and probably the Part D premiums paid by seniors will go up.
Insurance companies that pay for the drugs used by their customers can bargain on price with the drug manufacturers. But those manufacturers will bargain harder to get higher prices for the drugs. Ultimately that would probably result in higher insurance premiums.
And people without health insurance, or Medicare or Medicaid (Medi-Cal in California) will be out of luck. They will just have to pay whatever the drug companies demand.
According to US Bankruptcy Court records, more than 1.5 million people file for bankruptcy each year. An according to research done by Harvard University 62% of those bankruptcies resulted from overwhelming medical expenses. Even more interesting, 72% of those who filed bankruptcies because of medical bankruptcies DID HAVE HEALTH INSURANCE. Increases in the cost of drugs would make things even worse.
Bernie Sanders proposed the best solution to all of this, Medicare for all. If Medicare was allowed to negotiate with drug companies, and it covered everyone, it would be negotiating for everyone. Everyone would benefit from the lower drug prices.
Proposition 61 helps only the state Government of California and those Californians covered by Medi-Cal. It does nothing for any other Californians or for people across this nation. In fact it could make things worse for the rest of us. Sadly, we must vote NO on Proposition 61.
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