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Tags: medicare | part d

Medicare Resolution Would Be Bad for Today's Seniors, Worse for Tomorrow's

illustration of a bottle of prescription pills sitting in a paper boat made from a prescription pad floating in water

Jared Whitley By Thursday, 04 August 2022 10:08 AM EDT Current | Bio | Archive

The endless conundrum of modern health care — particularly for a nation-state as enormous as the United States — is that if there were an easy solution, we’d already be doing it.

The notion that everyone can enjoy perfect, “free” health care with a wave of a wand is pure fantasy. There is no magic wand, and we should mistrust those who promise that such magic is possible and end up ruining what’s already working well.

Alas this is what Congress has in mind for Medicare Part D, with a Medicare resolution dangerously close to passing that falls short of lowering beneficiary out-of-pocket costs, and threatens to defund R&D investment for diseases of aging.

Probably the most successful federal programs in a generation, Medicare Part D expanded health care access while saving the government money. It has helped millions of seniors get less expensive, preventive treatments before the need arose for more expensive ones since it passed in 2003, while preventing the Secretary of Health and Human Services from interfering in price negotiations between Part D plans, drug manufacturers, and pharmacies.

The goal was to let the free-market work its magic. Even the harshest critics of the program’s architect, President George W. Bush, had to admit it worked because it did.

But now Congress wants to mess up one of the few bills they hit out of the park. They are redesigning Part D to include a $2,000 catastrophic cap helps only a small percentage of beneficiaries. Of more than 32 million non-Medicaid eligible Medicare beneficiaries, fewer than 900,000 had out-of-pocket costs above the $2,000 cap in 2019.

A better alternative that patient advocacy groups are pushing for is to lower Part D’s catastrophic cap to $100 per month, while eliminating the annual $480 deductible to provide more seniors with relief.

Troublingly, the bill repeals the Medicare rule requiring health plans and Pharmacy Benefit Managers (PBM) to pass negotiated savings to patients at the pharmacy counter — so, undoing the free-market advantages that made Part D so successful in the first place. Without this requirement, seniors will have zero protection from Medicare Advantage plans that will instead continue to pass the savings not on to seniors but to themselves, even when the government is negotiating on their behalf.

This reconciliation bill includes other bad news for Medicare beneficiaries. It increases the cost sharing on Part D for all beneficiaries from 23% to 25%.

It offers zero help for seniors with lower deductibles or first dollar coverage relief, an insurance policy with no deductible where the insurer assumes payment once a insurable event occurs. It removes the $35 insulin copay cap for chronic diabetes.

The high out-of-pocket costs charged by insurers are a serious problem for most Medicare beneficiaries, many seniors on fixed incomes. Of the 16 national Medicare Part D plans in 2022, 12 charge beneficiaries 40% to 50% coinsurance for brand name medicines, according to a report by the Kaiser Family Foundation, even if plans approve these treatments as necessary.

Furthermore, the bill attacks medical research in an effort to “get Big Pharma,” warping financial incentives from low-copay pills that can quickly become generic to high-copay injectables that are harder to copy. Today’s drugs average about 14 years on the market before generics come online, which is usually enough time to get the returns necessary to justify the costly, risky research process.

Some are calling this a “tipping point downward for U.S. innovation from which it would take many years to recover even if the policy were eventually reversed.”

Roughly two-thirds of all new medicines are created in the United States because our free-market health care system rewards innovation. Without that power, new drugs — like the ones designed to combat COVID — don’t get made. This is particularly important for medicines to help aging populations.

While Part D was conceived to help the elderly, this seems designed to hurt them. It’s not on the scale of the conspiracy theory that China came up with the "Wuhan virus" to kill their own elderly population, but this Medicare plan certainly doesn’t look good.

This bill must be fixed, which Congress can do during reconciliation. It needs to eliminate the deductible and create a $100 per month out-of-pocket cap, guarantee that it protects the free-market forces that made Part D so effective to begin with, and empower Medicare to get better discounts on drugs only after 14 years.

There is no magic wand, but sure would be nice if someone could make this bill disappear.

Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. Read Jared Whitley's reports — More Here.

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The endless conundrum of modern health care - particularly for a nation-state as enormous as the United States - is that if there were an easy solution, we'd already be doing it.
medicare, part d
Thursday, 04 August 2022 10:08 AM
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