House Democrats’ bill to lower drug prices would raise wages for people on employer-sponsored health insurance by $116 billion over 10 years, according to the Congressional Budget Office (CBO)
CBO and JCT estimate that Title I would increase these taxable wages and salaries for people on employment-based health insurance (not counting those in the Federal Employees ir”utttr Benefiis program) by approximately $116 billion over the2020-2029 period. For the pu{pose of this estiriate,-w” urirr-. that employee total compensation remains the same and that when premiums decrease, wages increase (i.e. a o’wage pass-back”)’
The reason for the wage increase, the letter states, is that when drug prices go down, the cost of health insurance also goes down because the insurer’s costs decline. When employers don’t have to spend as much money on health insurance for their workers, they have more money to put into wage and salary increases.
Democrats touted the findings as an additional benefit of their legislation, which on Thursday passed the House on a largely party-line vote. Democrats are expected to make the passage of the legislation a key part of their reelection effort next year.
Republicans remain against the legislation, saying it is highly partisan and has no chance of becoming law. Senate Majority Leader Mitch McConnell is likely to ignore the legislation and President Donald Trump has vowed to veto it.
The nonpartisan Congressional Budget Office estimates the bill would save Medicare $456 billion over a decade, but also keep eight new drugs from coming to the market.
CNBC:
