AFP-GA Opposes Medicare Part D Rebate Proposals

September 03, 2013

Dear Georgia Congressional Delegation:

On behalf of more than 50,000 Americans for Prosperity activists in Georgia, I encourage you to oppose any proposal to tax the Medicare Part D program in order to pay for higher levels of federal spending. This so-called rebate proposal is more accurately described as a tax hike for seniors in the form of higher Part D premiums.

Created in 2006, Medicare Part D provides prescription drug coverage for Medicare beneficiaries. The program has successfully used market mechanisms, such as competition and choice, to improve access and control costs, making it an anomaly among government programs. By allowing insurers and pharmaceutical companies to negotiate and compete for business, Medicare Part D means that seniors can purchase drugs in greater variety and at lower prices.

Recent proposals would require pharmaceutical companies to remit as much as 23 percent of their sales back to the federal government. Make no mistake—this so-called “rebate” is a tax hike. Companies will respond by embedding the cost of the tax in the price of the drugs they provide, driving up the total cost of insurance. In a report for the American Action Forum, Former Congressional Budget Office Director Douglas Holtz-Eakin found that American seniors will see their Part D premiums rise as much as 40 percent under this type of proposal.

Over 50,000 AFP activists call the Peach State home, and they are closely watching your actions on this issue. They didn’t send you to Washington to increase their health care costs or to promote higher levels of federal spending, but that’s precisely what this rebate proposal would do. I urge you to oppose any attempts to tax Medicare Part D program.

Sincerely,

Virginia Galloway
Georgia State Director
Americans for Prosperity

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