Drug costs are the largest driver of health care costs across the nation. Potential changes to the health care system moving forward as part of the “Big Beautiful Bill” could impact Medicaid recipients nationwide and a large portion of Louisiana residents. Walter “Dub” Lane, Associate Professor of Economics and Finance at UNO, joined WWL’s Tommy Tucker to discuss the impact of the looming changes.
According to recent data, Medicaid coverage rates in Louisiana varied between 22.3 and 47.2% across different age groups. Any changes to coverage would have a sweeping impact in the state, particularly among children, seniors, and low-income individuals. Those who have been relying on Affordable Care Act subsidies for insurance will now become uninsured, according to Lane.
“What makes the free market work is competition, and the question becomes, 'Is there competition between drug manufacturers to keep the costs down?' The answer is: 'If they have a patent, there is no competition.
They have a monopoly,'" Lane explained.
In the United States, drug prices are regulated much like the electric companies and other monopolies. While economists generally agree that if the market is working, it should remain as is. “However, when the market isn’t working, it may require some intervention,” added Lane.
When asked flatly by Tommy Tucker if the current system is sustainable, Lane answered, “I don’t think so.”