Mylicka Morton: Florida businesses cannot afford costly federal ‘delinking’ policies

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It is no secret that America’s health care system is an intricate web riddled with complexities. However, an often overlooked but crucial contributor to the system is the pharmacy benefit company. As a proud business owner and accountant in Orlando, I am deeply concerned about recent “delinking” proposals circulating in Congress that would eradicate performance-based incentives for pharmacy benefit companies – something that is instrumental for employers and other health plan sponsors in saving money on health care costs.

These proposals have the potential to jeopardize the delicate balance that sustains our health care system and could have far-reaching consequences for both businesses and families across the nation.

In recent years, pharmacy benefit companies have faced increasing scrutiny, despite saving businesses on average $878 per enrollee per year, and misguided calls for reform by those who champion big government intervention have echoed throughout the halls of Congress. While reforms may be necessary to address any shortcomings in the health care system as a whole, it is crucial to approach these changes with caution and a comprehensive understanding of their implications. The proposed “delinking” policies fail to strike this balance and, in fact, pose a serious risk to the efficiency and effectiveness of our health care system.

Performance-based incentives are a driving force behind the successful negotiation of rebates, which, in turn, contribute to the overall reduction of prescription drug costs for patients and put money back in the pockets of hardworking taxpayers. By targeting these incentives, Congress is not only undermining the impetus for pharmacy benefit companies to secure rebates, but also jeopardizing the critical flexibility businesses rely on to offer affordable coverage of medications for countless Americans – most of whom get their health benefits through their employer. In an era where prescription drug prices are exorbitantly high and affordable health care is already a significant concern, we cannot afford to further exacerbate the problem.

An analysis conducted by health care economist, Alex Brill, details the consequences these policies could have, including an astonishing $26 billion increase in premiums for those with employer-based or commercial health insurance. As a business owner, I know firsthand how crippling these additional costs would be; it would limit plan sponsors’ ability to provide their workforce with the coverage they deserve.

In a recent National Bureau of Economic Research (NBER) paper, University of Chicago Economics professor Casey Mulligan detailed how damaging “delinking” policies would be for America’s health care system by looking the proposal’s impact on the Medicare Part D program. Mulligan discusses how this change in policy would have profound negative effects on drug pricing and utilization, causing a substantial annual shift of billions of dollars from patients and taxpayers to big pharmaceutical companies, creating a system that completely abandons patient-first solutions. The anticipated results of these policies also include a marked increase in annual federal spending on Medicare Part D premiums, escalating $3 billion to $10 billion annually. Any associated rise in Medicare subsidies for out-of-pocket expenses would further compound the financial burden on patients and taxpayers.

Combined, “delinking” threatens to raise premiums by nearly $40 in the Medicare and commercial markets. This certainly can’t be what lawmakers intended when they introduced these proposals.

As we consider necessary reforms to our health care system to better protect and provide for American citizens, I urge our nation’s leaders to be mindful of the evidence presented by expert economists on the negative impacts of “delinking” policies. Rather than dismantling the incentives that drive pharmacy benefit companies to negotiate cost-saving rebates and save patients money, let us focus on policies that encourage healthy competition, limit the federal government’s role in the pharmaceutical industry and secure the long-term viability of our health care system. The health and well-being of our communities depend on thoughtful, balanced policymaking that protects pharmacy benefits for all Americans.

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Mylicka Morton is a business owner and accountant in Orlando.