Dems on the brink of sweeping Medicare changes

Democrats are on the brink of making the most significant changes to Medicare in more than a decade, which would bring lower drug prices and out-of-pocket costs for some of the program’s 64 million enrollees.

Why this is important: New limits on how much patients have to pay for drugs each year could provide a lifeline to seniors with conditions like cancer or multiple sclerosis who face thousands of dollars in drug bills, and lower overall costs would provide relief to more enrollees.

The big picture: Nearly 1.5 million will benefit from a $2,000 out-of-pocket cost cap in Medicare’s Part D drug benefit, and 1.3 million will pay 5% of total drug costs if they exceed the catastrophic coverage limit, since the elimination of a requirement. Kaiser Family Foundation Estimates, based on 2020 data.

yes but: While the bill is projected to save taxpayers hundreds of billions of dollars over the next decade, opponents of the bill claim that these savings will not be felt by patients.

  • The law would not touch prices in the commercial insurance market, where most Americans get coverage through work.
  • It will open negotiations only to drugs that are more than a few years past their FDA approval or licensure date, but some of the program’s biggest spenders are expected to be eligible for negotiations.

At least some policies It can provide a tonic to seniors on fixed incomes who are reeling from rising prices and financial worries.

  • Starting this fall, it will penalize drug companies that raise prices faster than inflation, and starting next year, it will eliminate out-of-pocket costs for adult vaccines covered under Medicare’s Part D drug benefit.
  • In 2024, the law would eliminate the 5% coinsurance requirement for catastrophic coverage while increasing eligibility for low-income subsidies.
  • By 2025, it would cap out-of-pocket costs in Part D at $2,000.
  • And starting in 2026, it would trigger direct government negotiations with manufacturers, subjecting 10 yet-to-be-determined high-cost drugs to cost controls. This number will increase to 15 in 2027 and 20 in 2029.

From 2024 to 2029, Democrats’ plan would limit premium increases in the Part D program to 6%.

  • It would delay the Trump administration’s rules on drug rebates that drugmakers offer to pharmacy benefit managers to get products on their formularies.

The other side: The pharmaceutical industry argues that such negotiations will stifle innovation and reduce venture capital funding for promising treatments.

  • The Congressional Budget Office estimates that 15 out of 1,300 drugs, or 1%, will not be on the market over the next 30 years because of the bill’s drug provisions.

Bottom line: Democrats plan caps Years of futile efforts Lets Medicare use its purchasing power for the first time, despite its limitations, to change the drug pricing equation.

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