Covered California, the Golden State’s exchange for Obamacare, has announced that it will cap the price of prescription drugs for the 2.2 million Californians who have bought individual insurance plans.
“Starting in 2016, most people will only have to pay a maximum of $150 or $250 per prescription, per month. These caps are for Covered California’s so-called silver and platinum plans. Bronze plans will have caps of $500,” NPR reports. But the effect on premium prices is unclear.
The California exchange, so frequently held up by Obamacare’s advocates as a model, has run into budget and enrollment problems. The enrollment numbers for 2015 have been disappointing, and Covered California is slashing its own budget 15% as a result, while repairing its balance sheet with $100 million in federal funds, which critics charge is illegal. The program also faces charges of cronyism after $184 million in no-bid contracts were awarded to well-connected companies.
Most California media outlets reported the proposed caps in glowing terms, noting that the state legislature is considering similar caps for those with insurance through their employers. But these outlets also tend to ignore the effect on premiums, as well as the problem with lowering prices for drugs that require heavy investments to produce.
Major pharmaceutical companies had been among Obamacare’s major proponents, largely because drug prices remained unaffected by the law.