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House committee approves $10.64 prescription tax, stirring major concerns

House Bill 238 would introduce a $10.64 tax on every prescription filled in the state.

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In a noteworthy development within the often fraught tug of war between business and legislative overreach, the Insurance Committee of the Alabama House of Representatives has given the green light to House Bill 238, a controversial piece of legislation that introduces a $10.64 tax on every prescription filled in the state. This move has sparked a wave of concern among stakeholders, as it is poised to levy substantial financial burdens on Alabama’s employers, employees, and their families, cumulatively amounting to millions of dollars annually.

The bill, championed by Representative Phillip Rigsby of Huntsville, sailed through the committee on Wednesday, despite the burgeoning outcry from various quarters, including the Alliance of Alabama Healthcare Consumers (AAHC). This body has vocally criticized the bill, highlighting its numerous shortcomings and the financial strain it will impose on the state’s populace.

Dubbed by critics as a “Pharmacy Tax,” the legislation is set to affect all Alabamians with pharmacy benefit coverage, either through increased premiums or direct out-of-pocket expenses at the pharmacy. The proposed $10.64 levy on every prescription translates to an additional annual cost of approximately $275 per individual, or $1,100 for a typical family, escalating healthcare expenditures without addressing the underlying issue of high drug prices dictated by manufacturers.

The AAHC argues that the bill overlooks the core issue of soaring drug costs, instead imposing higher expenses on businesses that provide prescription drug coverage, subsequently inflating employee benefit costs. This approach, according to the AAHC, sidesteps the crucial challenge of drug pricing, allowing manufacturers to persist with their cost-plus pricing strategies, which inevitably trickle down to consumers.

Moreover, HB238 is seen as a burden on employers, potentially jeopardizing the viability of employer-provided healthcare plans and increasing financial pressures on workers. Critics also contend that the bill fails to enhance the quality or accessibility of healthcare, serving merely as a vehicle for the pharmacy sector to push through a series of previously rejected demands.

Another point of contention is the bill’s potential to weaken consumer protections. By restricting the state’s ability to probe into allegations of fraud, waste, and abuse, HB238 could inadvertently shield unethical practices within the pharmacy industry, to the detriment of Alabama’s consumers and insurers.

As the bill advances to the broader legislative arena, its implications are being scrutinized by stakeholders across the spectrum. The AAHC remains steadfast in its opposition, committed to combating policies that escalate healthcare costs and impede access to affordable benefits, underscoring the bill’s perceived role as an impediment rather than a solution to Alabama’s healthcare challenges.

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The Alabama Political Reporter is a daily political news site devoted to Alabama politics. We provide accurate, reliable coverage of policy, elections and government.

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