\u201cAs vice president, Kamala Harris cast the tie-breaking vote to cut, as you know, Medicare by $273 billion. She cast a vote to cut Medicare.\u201d\u00a0<\/p>\n
\u2014 Former President Donald Trump at a July 24 campaign rally in Charlotte, North Carolina.<\/p>\n
During a July 24 campaign rally<\/a> in Charlotte, North Carolina, former President Donald Trump claimed that Vice President Kamala Harris was responsible for passing legislation in the U.S. Senate to cut Medicare spending by nearly $300 billion.<\/p>\n \u201cAs vice president, Kamala Harris cast the tie-breaking vote to cut, as you know, Medicare by $273 billion,\u201d Trump told rally attendees. \u201cShe cast a vote to cut Medicare.\u201d<\/p>\n Trump gave no further explanation for which vote he was referring to or how he arrived at that figure. A campaign spokesperson told KFF Health News in an email that Trump was referring to a statistic from a Wall Street Journal op-ed<\/a> by Tomas Philipson, a University of Chicago economist and a former Trump administration official.<\/p>\n Philipson\u2019s op-ed argued that the Inflation Reduction Act \u2014 a sweeping climate and health care measure passed in 2022 for which Harris cast the tie-breaking vote<\/a> \u2014 would harm Medicare patients by driving up costs. His article cited a Congressional Budget Office analysis<\/a> showing that the measure\u2019s health care provisions would reduce the federal deficit by $237 billion over 10 years. \u201c(M)ost of that reduction comes from the program spending less on prescription drugs,\u201d Philipson wrote.<\/p>\n But the government\u2019s spending less on Medicare programs would not amount to the kind of \u201ccut\u201d to Medicare benefits Trump implied, experts told KFF Health News. Several provisions in the law pertaining to prescription drug pricing are widely seen by health policy experts as beneficial to both consumers and the government. Individual patients are expected to spend less out-of-pocket on their prescription drugs, while the government will reduce Medicare spending without any impact to services offered.<\/p>\n We dug into the facts surrounding Trump\u2019s claim and the law\u2019s effect on Medicare. It resurfaces a long-running debate over Medicare savings versus cuts<\/a> and the question of whether lowered spending automatically leads to a reduction in benefits for Medicare enrollees.<\/p>\n Following the Numbers<\/strong><\/p>\n The Inflation Reduction Act\u2019s many provisions include some intended to lower prescription drug costs for older Americans and others receiving Medicare insurance coverage.\u00a0<\/p>\n The law caps the cost of insulin<\/a> at $35 per month for most Medicare beneficiaries, establishes out-of-pocket spending limits for Part D drug coverage, and institutes penalties for drug companies that raise prices faster than the inflation rate. The law also authorizes Medicare officials, for the first time, to negotiate drug pricing directly with pharmaceutical manufacturers.\u00a0<\/p>\n \u201cThe idea behind drug price negotiation is that Medicare can use its buying power to get a better price than what is currently being negotiated for these drugs,\u201d said Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a health information nonprofit that includes KFF Health News.<\/p>\n According to an analysis by the Congressional Budget Office<\/a>, the nonpartisan federal agency that calculates the financial impact of new legislation, the Inflation Reduction Act\u2019s health care measures will have a mixed effect on spending. Some steps, such as the cap on beneficiaries\u2019 out-of-pocket prescription drug spending, will likely cost the government more. But others, including the drug price negotiations, are projected to save the government money. All told, the Inflation Reduction Act\u2019s health care measures are expected to save taxpayers $237 billion over 10 years.<\/p>\n On the numbers, Trump said the law would \u201ccut Medicare\u201d by $273 billion; he likely meant $237 billion.<\/p>\n Despite the government being expected to spend less overall, beneficiaries\u2019 services would not necessarily be cut, as Trump claimed. In fact, most Medicare recipients would likely see their costs decrease, too, while keeping the same level of benefits.<\/p>\n \u201cThere are big shifts in who\u2019s paying for what,\u201d said Andrew Mulcahy, a senior health economist who researches prescription drug markets at the Rand Corp., a nonpartisan think tank. \u201cBut that doesn\u2019t mean they\u2019re getting any less. If anything, they\u2019ll have better access to drugs.\u201d<\/p>\n Cubanski, echoing Mulcahy, said: \u201cWhen you\u2019re reducing Medicare spending, that\u2019s not the same thing as a cut to Medicare or cutting Medicare benefits. If you buy eggs every week and now you\u2019re getting them cheaper, you\u2019re still getting the eggs, you\u2019re just getting them for a lower price.\u201d<\/p>\n A year ago, the Centers for Medicare & Medicaid Services named the first 10 drugs<\/a> on which it will focus, though the exact savings from the drug pricing negotiations process will be known only when the government and drug manufacturers reach agreements. The new pricing for this first batch of medications is set to take effect in 2026.<\/p>\n Whether the government can negotiate meaningfully lower costs versus current prices is unclear, especially since pharmacy benefit managers, or PBMs \u2014 middlemen in the negotiations among drug companies, insurers and pharmacies \u2014 are tasked with doing that.<\/p>\n \u201cI think for many of the drugs selected in the first year, my expectation is that the government won\u2019t be able to do much better than the PBMs,\u201d Mulcahy told KFF Health News.\u00a0<\/p>\n The Medicare drug pricing program could have negative side effects. Philipson, for example, argued in his op-ed that the negotiations will \u201cdeter companies from developing new medicines\u201d and threaten older Americans\u2019 access to doctors, as manufacturers and hospitals would likely be reimbursed less for their drugs and services.<\/p>\n Cubanski brushed off such concerns.<\/p>\n \u201cThe drug industry certainly has a vested interest, you know, in raising alarm bells,\u201d she said. \u201cI think it\u2019s just still too early to talk about \u2018the sky is falling\u2019 with regard to pharmaceutical innovation. Time will tell, but it certainly is the case right now that the law includes a lot of provisions that will be very helpful for Medicare beneficiaries.\u201d<\/p>\n On Aug. 15, CMS announced the results<\/a> of its negotiation over the first round of drugs. The new prices represent discounts ranging from 38% to 79% of the original costs. White House officials said the negotiations will lead to $6 billion in savings for Medicare the first year, while Medicare recipients are expected to save an additional $1.5 billion in out-of-pocket costs.<\/p>\n Our Ruling<\/strong><\/p>\n Trump\u2019s statement is wrong both on the hard numbers and his interpretation of what they mean.<\/p>\n The analysis Trump cited, per his campaign, said the Inflation Reduction Act\u2019s health care provisions would lower the deficit by $237 billion \u2014 not $273 billion, as the former president claimed. Moreover, whatever the exact number is, multiple experts pushed back against the notion that the savings equated to a \u201ccut\u201d to Medicare, as Trump claimed.<\/p>\n We rate Trump\u2019s claim False.<\/p>\n Centers for Medicare & Medicaid Services, Fact Sheet: Medicare Drug Price Negotiation Program Revised Guidance<\/a>, June 2023.<\/p>\n Centers for Medicare & Medicaid Services, Medicare Drug Price Negotiation<\/a>.<\/p>\n Program: Selected Drugs for Initial Price Applicability Year 2026<\/a>, August 2023.<\/p>\n The Wall Street Journal, \u201cThis Is How President Biden \u2018Beat Medicare<\/a>,\u2019\u201d July 9, 2024.<\/p>\n Congressional Budget Office, Estimated Budgetary Effects of Public Law 117-169, to Provide for Reconciliation Pursuant to Title II of S. Con. Res. 14<\/a>, Sept. 7, 2022.<\/p>\n Congressional Budget Office, How CBO Estimated the Budgetary Impact of Key Prescription Drug Provisions in the 2022 Reconciliation Act<\/a>, February 2023.<\/p>\n C-SPAN, \u201cFormer President Trump Campaigns in Charlotte, North Carolina<\/a>,\u201d July 24, 2024.<\/p>\n Email exchange with Karoline Leavitt, national press secretary for Donald J. Trump for President, July 29, 2024.<\/p>\n KFF Health News, \u201cTrump Is Wrong in Claiming Full Credit for Lowering Insulin Prices<\/a>,\u201d July 18, 2024.<\/p>\n Phone interview with Andrew Mulcahy, senior health economist at Rand Corp., July 26, 2024.<\/p>\n Phone interview with Juliette Cubanski, deputy director of the program on Medicare policy at KFF, July 29, 2024.<\/p>\n United States Senate, Roll Call Vote 117th Congress-2nd Session, Aug. 7, 2022.<\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\nOur Sources<\/h4>\n
USE OUR CONTENT<\/h3>\n