Download audioHelping the Elderly Afford Prescription Drugs

A major election-year battle is brewing over helping the elderly afford prescription drugs. The government's solution: Impose price controls. One prominent bill in Congress—supported by many members of Michigan's congressional delegation—would fix prescription drug prices by federal decree.

How many times do lawmakers have to learn Economics 101? Price controls boost demand and stifle supply, which always leads to rationing. Do we really want bureaucrats deciding who gets how much of what drug?

Canada has price controls on all health care. Canadians are routinely denied access to newer and better medicines. Canada produces far fewer new drugs than we do, largely because of price controls.

Instead, why not let the elderly set up tax-free medical savings accounts to take care of their prescription drug costs? This program is already available, but is severely restricted by law. Opening this option to everyone wouldn't just make medical expenses easier to bear—it would lower prices by intensifying competition among drug manufacturers.

Medical Savings Accounts would help senior citizens afford prescription drugs without doing damage to America's ability to produce the best medical care in the world.