Bipartisan measure would cap out-of-pocket costs for Medicare
Part D beneficiaries
by Dena Bunis, AARP, July 25, 2019
A bill that would cap out-of-pocket
prescription drug costs for Medicare enrollees at $3,100 a year and save the
program $100 billion over a decade passed by a 19-9 bipartisan vote Thursday in
the Senate Finance Committee.
The bill, the Prescription Drug Pricing
Reduction Act of 2019, would change the financing structure of Medicare Part D
to permanently eliminate the coverage gap — or donut hole. It would also
require pharmaceutical companies and insurance plans to pay the lion's share of
the cost of prescriptions for patients whose annual drug bills are the highest.
The measure would cap patients’ out-of-pocket costs in Part D by removing the 5
percent share of a drug's cost that a Medicare beneficiary currently pays when
their annual prescription charges are high enough to be considered
catastrophic. These changes would begin in 2022.
The measure also would require drug
manufacturers to pay a rebate to Medicare if they raise prices more than the
rate of inflation. In a letter to the committee leaders in support of the bill,
AARP Chief Advocacy and Engagement Officer Nancy LeaMond pointed out that
according to AARP's most recent Rx Price Watch report,
the average annual price increases for brand-name drugs have exceeded the rate
of inflation every year since at least 2006.
Finance Committee Chairman Chuck Grassley
(R-Iowa) said this bill will “provide peace of mind to millions of seniors who
will never have to worry about going bankrupt to pay for medication.” Sen. Ron
Wyden (D-Ore.), the senior Democrat on the panel, agreed: The measure “will be
the end of an era when drug prescriptions drove seniors into bankruptcy,” he
said.
According to the nonpartisan Congressional
Budget Office, over 10 years the Grassley-Wyden measure would save Medicare
beneficiaries $27 billion in out-of-pocket costs and $5 billion in premiums.
The bill does not include a provision to
allow Medicare to negotiate drug prices directly
with pharmaceutical manufacturers, even though many of the senators on the
committee said they would support one. “We all know we pay the highest prices
in the world,” said Sen. Debbie Stabenow (D-Mich.), who offered an amendment to
allow such negotiations. “We could actually cut prices today."
Stabenow's amendment failed by a vote of
16-12, but Wyden made it clear that the issue of Medicare negotiating prices is
not going away. “We're not going to sit by while opportunities for seniors to
use their bargaining power in Medicare are frittered away,” he said. Lawmakers
are expected to try again to get this provision included on the Senate floor.
Before the markup, LeaMond issued a statement
strongly supporting the Stabenow provision. “Addressing high drug prices is
critical for AARP's 38 million members, and allowing Medicare to use its buying
power to lower prescription drug prices has long been a priority for AARP and
its members,” LeaMond said.
Allowing Medicare to negotiate for drug prices
is one of the key pillars of AARP's Stop Rx Greed Campaign. Earlier
Thursday, AARP cosponsored an event with the Hill newspaper that called
attention to policy efforts to curb the rising cost of prescription drugs.
"We all know that there's a long road
from the committee room and leadership offices to the House and Senate floor
and then the president's desk to sign something into law,” LeaMond told the
audience, which heard from Sens. Tammy Baldwin (D-Wis.) and Mike Braun
(R-Ind.), sponsors of a bill that would increase drug price transparency,
another AARP priority. “I am hopeful that we'll get there,” LeaMond said, “but
it will take a lot of work and a focus on getting results for the American
people."
Thursday's action means the Grassley-Wyden
measure is ready to go to the full Senate, but lawmakers made it clear there
would likely be more changes before the bill reaches a floor vote.
The White House has said it supports the
proposal. President Trump has repeatedly said he wants to see action to lower
prescription drug prices. Leaders in the House of Representatives say they are
also working on a prescription drug measure and expect to release it in
September.
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