Senator Warren, a long-time supporter of the Affordable Care Act, has recently had an "epiphany" about the "industry consolidation and price increases" that have resulted from the healthcare law.
In a letter to the inspector general of the Department of Health and Human Services, Senator Warren expressed her concerns about whether "vertically-integrated health care companies are hiking prescription drug costs" and potentially "evading federal regulations." The letter, co-authored with Senator Mike Braun, a Republican from Indiana, criticizes the nation's largest health insurers for allegedly circumventing Obamacare's medical loss ratio (MLR), as reported by The Journal.
In the letter, Warren outlines how health insurers have taken advantage of the situation, leading to "sky-high prescription drug costs and excessive corporate profits." She writes, "In functioning markets, generic drugs cost 80 to 85 percent less than their name-brand equivalents, giving patients much-needed relief from high drug costs and saving taxpayer dollars." However, she notes that patients, including those in public health care programs like Medicare and Medicaid, are not experiencing this relief if they use or are forced to use vertically integrated specialty pharmacies.
The senators further explain, "By owning every link in the chain, a conglomerate like UnitedHealth Group – which includes an insurer, a PBM, a pharmacy, and physician practices – can send inflated medical payments to its pharmacy. Then, by realizing those payments on the pharmacy side – the side that charges for care – rather than the insurance side, the insurance line of business appears to be in compliance with MLR requirements, while keeping more money for itself."
The Journal's editorial board explains that despite Democrats' arguments that the MLR would benefit patients, "the rule has spurred insurers to merge with or acquire pharmacy benefit managers (PBMs), retail and specialty pharmacies, and healthcare providers." This has resulted in less transparency in healthcare spending, as insurers can increase reimbursements to their affiliates, thereby shifting profits.
Despite voting against Obamacare repeal efforts over the years, Warren has also advocated for a "Medicare for All" proposal during her 2020 presidential campaign. Fox News Digital's request for comment from Warren's office and the Department of Health and Human Services was not immediately answered.