The Democrats in Congress appear to be on the cusp of passing a more robust reconciliation package than recently anticipated, now that Senator Joe Manchin is on board. The package should reduce Medicare drug costs, saving money for people with Medicare as well as lives. Among other things, it would cap out-of-pocket expenses for drugs under Medicare Part D at $2,000 a calendar year.
The reconciliation package includes three key provisions, a $2,000 cap on Part D out-of-pocket costs, which would begin in 2025; Medicare drug price negotiation for a small group of high volume brand-name drugs, which would begin in 2026; and a limit on the amount Pharma can raise prices on drugs to inflation, which would begin in 2023.
The out-of-pocket cap on Part D should increase access to costly drugs, such as chemotherapies, for a lot of older adults and people with disabilities who have been forced to forgo them as a result of their enormous costs. Today, 1.45 million people reach the catastrophic coverage cap in Part D. They are then still liable for 5 percent of the cost of their drugs, which can easily be $5,000 or more given that many chemotherapies and other drugs for complex conditions cost well over $100,000. As a result, many stop taking life-saving drugs and die needlessly.
The limit on drug price inflation helps give the bill teeth. Without this limit, the out-of-pocket cap would make it easier for drug companies to raise prices because, with an out-of-pocket cap, people with Medicare are less likely to notice drug price increases. Yet, if Pharma could raise prices significantly, insurers would be forced to raise premiums, deductibles and copays for everyone with Part D.
Unlike most Congressional legislation, the reconciliation package comes with a clear penalty on drug companies that raise their prices above the inflationary rate. They must provide refunds to people with Medicare for the difference between what they are allowed to charge and what they charge above that amount.
The package limits drug price negotiation to ten high-cost drugs each year. HHS will identify those high-cost drugs that have been on the market for at least nine years and have no generic substitute. Beginning in 2029, it allows HHS to negotiate the price of 20 high-cost drugs a year.
The package originally had a provision limiting the cost of insulin, which was taken out when Senators Jeanne Shaheen and Susan Collins thought they had a bipartisan majority to support their insulin legislation. Now that these Senators have failed to secure that majority, insulin price negotiation could be included in the reconciliation package. People with Medicare Part D already benefit from a $35 monthly cap on their insulin costs if they choose a Medicare Part D plan with this protection.
The package would include free vaccines for about 4.1 million people with Medicare.
As of now, we do not know how Senator Kyrsten Sinema will vote on the package or, for that matter, the Democrats in the House of Representatives. That said, a vote on the package is expected shortly.
Here’s more from Just Care:
Leave a Reply