Four influential Democratic Senators delivered a message to their Republican colleagues and President Trump today: allowing Medicare to negotiate directly with Big Pharma is the best way to bring down prescription drug prices. In a press conference at the U.S. Capitol, Sens. Debbie Stabenow (D-MI), Amy Klobuchar (D-MN), Patty Murray (D-WA), and Chris Murphy (D-CT) emphasized the importance of Medicare drug price negotiation as the Senate considers multiple proposals to lower prescription costs.
“Prescription drug pricing is the ultimate example of a rigged system that needs to be unrigged to bring costs down.” – Sen. Debbie Stabenow (D-MI), 6/12/19
National Committee president Max Richtman joined the Senators at the podium as the prime spokesperson for the seniors’ advocacy community – accompanied by a group of yellow t-shirted volunteers from the organization’s Capital Action Team.
“People are dying — or their quality of life is poor — because high drug prices are forcing seniors to go without life-saving medications. It’s time to end pharma’s drug price gouging. It’s time to stop forcing seniors to cut their pills in half or skip a dose. That’s why the National Committee urges the Senate to approve legislation that would allow Medicare to negotiate prescription drug prices.” – National Committee president Max Richtman, 6/12/19
Richtman cited the anti-inflammatory Humira as an example of “out of control drug pricing.” The medication, which treats conditions including arthritis, Crohn’s disease, and colitis, retailed for $19,000 in 2012. Today, it costs a little over $40,000. The price essentially doubled in 7 years.
“Thankfully, seniors with Medicare Part D don’t have to shoulder the full cost. But at over $5,400 a year – their out of pocket cost for Humira is not cheap. Given that the income of half of Medicare beneficiaries is less than $26,200 a year, the cost of Humira alone is 22% of their income.” – Max Richtman, 6/12/19
John Glaser, an 80 year-old National Committee volunteer who suffers from diabetes, told the Senators that his prescription drug costs were so high in 2017 – over $5,000 – that he went through the Medicare Part D coverage ‘donut hole’ and soon hit the program’s catastrophic cap. “Allowing Medicare to negotiate prices [with Big Pharma] would be a benefit for me and millions of other seniors,” Glaser said.
One of the other Capital Action Team volunteers, Pat Cotton, told Entitled to Know that she takes a relatively new drug for myelofibrosis called Jakafi. Cotton said when she started the medication three years ago it cost $10,000 per month but now has jumped 40% to $14,000. She relies on Medicare, supplemental insurance, and a manufacturer’s subsidy to afford the drug. When the insurance company tried to take the subsidy away, she told them, “This drug is saving my life. If you take away the subsidy, you’re killing me.” (The subsidy was restored – but the drug no doubt will continue to climb in price.)
Glaser and Cotton are among the 43 million seniors and disabled in Medicare Part D whose purchasing power the Senators would like to leverage. Senator Klobuchar insisted that by allowing the Secretary of Health and Human Services to negotiate drug prices for Medicare, costs would eventually fall for patients of all ages. Klobuchar has introduced legislation in the Senate to lift the ban on Medicare negotiating with Big Pharma. The bill already has more than 30 cosponsors, but cannot pass without Republican support.
“I thought Republicans liked negotiation, competition, and free markets. This bill unleashes the market power of Medicare and evens the playing field.” – Sen. Amy Klobuchar (D-MN), 6/12/19
Klobuchar said that Republicans are under pressure from the electorate to lower prescription drug prices in the wake of the 2018 midterm elections. She also noted that during the 2016 campaign, President Trump voiced support for Medicare negotiating drug prices with pharmaceutical companies – but has yet to embrace any proposal to allow it.
Max Richtman insisted that it’s something the public clearly supports, pointing to polling that indicates over 90% of Americans want Medicare to be allowed to negotiate drug prices. According to AARP, Medicare could have saved more than $14 billion dollars on the top 50 prescription drugs in 2016 had the policy been in place.
As part of a bipartisan movement on Capitol Hill to confront “surprise medical bills,” Senators Patty Murray (D-WA) and Lamar Alexander (R-TN) are crafting legislation that would protect patients against unexpected health care expenses. But the Senators’ bill currently does not address one of the rudest surprises of all: when Medicare patients discover that they are on the hook for thousands of dollars in skilled nursing care costs because of the way they were classified during a hospital stay.
Hospitals often deem seniors who are – for all intents and purposes – inpatients as being on “observation status” – even if they remain in the hospital for several days. Those patients are then ineligible for Medicare coverage of skilled nursing care once they are discharged.
“The classification as observation patient is significant… because the Medicare statute covers a post-hospital stay in a skilled nursing facility only if the patient was hospitalized for three consecutive days as an inpatient.” – National Observation Stays Coalition, 6/5/19
Many hospital patients do not realize they were placed on “observation status” – or even know to ask. They often don’t learn that they’re liable for the full cost of skilled nursing care until a bill arrives weeks or months later. Those bills can total $10,000 per month – and in some cases, more. That’s an untenable burden for seniors on fixed incomes.
The National Observation Stays Coalition (of which the National Committee to Preserve Social Security and Medicare is a member) is pushing Congress to protect Medicare patients from these surprise bills as it moves forward with bipartisan legislation. The Coalition supports the provisions of the Improving Access to Medicare Coverage Act, sponsored by Senators Sherrod Brown (D-OH), Susan Collins (R-ME), Sheldon Whitehouse (D-RI) and Shelley Moore Capito (R-WV).
“The Improving Access to Medicare Coverage Act would allow for the time patients spend in the hospital under ‘observation status’ to count toward the requisite three-day hospital stay for coverage of skilled nursing care. [This] is a common sense policy that does not affect hospital care – but does protect the ability of beneficiaries to receive needed post-acute nursing home care.” – National Observation Stays Coalition, 6/5/19
The Coalition sent a letter today to Senators Murray and Alexander, urging them to incorporate these protections into their ‘surprise medical billing’ legislation. “It is simply not right to limit access to quality care for those most in need,” says the Coalition’s letter, which was signed by the National Committee. “Now is the time for Congress to pass legislation that addresses this issue once and for all.”
Congresswoman Gwen Moore (D-WI) and Senator Tammy Baldwin (D-WI) are taking concrete action to reduce the number of Social Security field office closures around the country. They have introduced legislation to make it harder for the Social Security Administration (SSA) to summarily shutter these crucial customer service centers without Congressional oversight and input from local communities.
SSA has closed more than 60 field offices since 2011, inflicting hardship on lower income claimants who can’t easily access the nearest alternate locations. These closings have taken place largely – but not exclusively – in urban areas with minority populations. When an office in Congresswoman Moore’s Milwaukee district serving poor and mostly Hispanic residents was summarily shut down in 2017, she and Senator Baldwin said enough is enough.
“Social Security Administration (SSA) office closures do nothing but create hardship for seniors and other beneficiaries who may struggle to travel long distances or have medical, work, and childcare obligations that make long wait times and overcrowding prohibitive.” – Rep. Gwen Moore (D-WI)
The “Maintain Access to Vital Social Security Services Act,” which Moore originally introduced in the previous Congress and is now paired with Baldwin’s Senate bill, calls for stricter oversight of SSA in the realm of field office closures. The bill includes:
- A moratorium on field office closures.
- A binding 180-day public notification and comment period before any field office is closed.
- Congressional oversight of the General Services Administration, (the ‘realtor’ for SSA), which often claims there are no available, nearby sites for relocating field offices.
“There’s currently very little oversight when SSA closes a field office,” said Dan Adcock, the National Committee’s Director of Government Relations and Policy on Facebook Live. “This bill would adopt a procedure that’s similar to how the Postal Service closes post offices.”
Adcock points out that before a U.S. post office is closed, there is a process including a government review and public comment period. Local residents can give input on the potential impacts of the closures – something that is not currently required for the closure of a Social Security field office.
In the past two years alone, SSA has shut down field offices in several major metropolitan areas – including Chicago, Milwaukee, Baltimore, and Arlington, VA just outside Washington, D.C. These closures have forced low income claimants to take the bus or subway for up to 2 hours round-trip to an alternate location.
“Closing Social Security field offices like these causes undue difficulty for the elderly, disabled and working people who rely on public transportation.” – National Committee president Max Richtman.
In 2018, volunteers from the National Committee’s Capital Action Team participated in protests against field office closures in Arlington and Baltimore. Protesters carried signs reading, “Keep SSA Open!” and chanting “Social Security, find a way! This office has got to stay!”
SSA has sought to reduce costs after seeing Congress cut its operating budget by 11% between 2010 and 2017. Funding levels have since been restored to more adequate levels, but the agency’s operating budget still has not kept pace with inflation – and customer service continues to suffer.
Retiree Julian Blair insisted that Congress shouldn’t have cut funds for SSA operations when Social Security’s administrative costs are already paid for by workers’ payroll contributions. “We paid into the system – for benefits and for decent service,” he told a crowd of protestors. “How can they treat people this way?”
Social Security claimants endure long wait times on SSA’s customer service phone line, crowded field offices, and excessive wait times for disability hearings. These hardships, along with field office closings, can undermine public support for Social Security. The legislation introduced by Rep. Moore and Senator Baldwin is a crucial step toward improving customer service and protecting Social Security itself.
Near retirees in Greater Baltimore are being beckoned by a billboard on wheels encouraging them to delay claiming Social Security. Baltimore is one of five U.S. cities where the National Committee has rolled out the “Delay and Gain” project, now in full swing. In addition to mobile billboards, the public education project is reaching out to older workers via radio ads, editorial content, and social media. The message is straightforward: workers who delay retirement can gain bigger Social Security benefits – extra income that they’ll need in old age.
One of the “Delay and Gain” mobile billboards visited Timonium, Maryland – just North of Baltimore – on Wednesday, eliciting supportive honks from motorists and curiosity from passersby. It’s one of the trucks spreading the message in cities like Baltimore, Pittsburgh, Detroit, and Louisville.
“Did you know that you can gain Social Security benefits by delaying retirement?” asked a National Committee volunteer passing out literature to shoppers and workers on lunch break in Timonium.
It’s a crucial message for today’s older workers. Nearly half of Americans surveyed did not know that they gain benefits by delaying claiming Social Security – or that they are penalized for claiming before the full retirement age of 66 (or 67 for those born after January 1, 1960). Even so, the average retirement age in Maryland is 64 — two years before Social Security’s full retirement age.
Workers’ monthly Social Security benefits are reduced by claiming at the earliest eligible age of 62 — and boosted up to 30% for waiting until the full retirement age of 66. Seniors who delay claiming until age 70 receive an even larger bump — up to 44% more than if they had filed for benefits early. For the average beneficiary, that can mean a difference of roughly $1,000 per month in extra income.
Maximizing Social Security benefits is important because the average monthly retirement benefit is about $1,460 or $17,500 annually. That’s only a few thousand dollars above the federal poverty line for individuals. Even with Social Security, some 8% of seniors under 70 live in poverty. (The poverty rate jumps to 12% for those over 85.) Older women are in greater peril than men, because they tend to live longer and have less retirement savings and lower Social Security benefits.
A recent Twitter poll by the National Committee tracks closely with previous data. A third of respondents say they plan to claim Social Security benefits between ages 62 and 64, despite the financial advantages of waiting.
Of course, older workers have their reasons for claiming early. Some cannot postpone retirement due to disability, age discrimination, or caring for family members. But others offer rationales that don’t make financial sense. Many near seniors say they’re sick and tired of working, not realizing they’ll be more sick and tired of not having enough money to pay the bills in old age. Others feel they must claim Social Security now, fearing it won’t be there for them in the future. And then there are those who try to calculate their “break even” point on lifetime benefits, thinking that they’ll receive a higher total payout over the years by claiming early.
The “Delay and Gain” project corrects these misguided notions by reminding workers that Social Security will be completely financially sound until 2035, and even then could still pay 80% of benefits – and only in the unlikely event that Congress takes no corrective action. To workers considering their “break even” points, the project reinforces that Social Security is income insurance, not an investment vehicle to be “gamed.” Workers should maximize their monthly benefits, which last their entire lives. People who reach age 65 today can expect to live nearly 20 more years – and will be happy to have the additional income in their elder years.
“We want seniors to be able to pursue a comfortable retirement, with the least amount of stress about paying the bills,” said Max Richtman, president and CEO of the National Committee. “This project will show older workers how to get there.”
Workers can use the Social Security Administration’s online calculator to determine benefit amounts at different ages.
The Trump administration has come out with yet another proposal to tinker around the edges of the prescription drug pricing problem without confronting it head-on. Health and Human Services (HHS) Secretary Alex Azar has issued a new rule requiring pharmaceutical companies to include drug prices in television ads.
According to the Associated Press, the ten most commonly advertised drugs range in price from roughly $500 to $17,000 per month “for a usual course of therapy.” While viewers may experience some sticker shock when they see these figures, putting prices in tv ads is not likely to push drug prices down. As a professor of health policy at Vanderbilt University told NBC News:
“Telling people what the price is doesn’t change the price. Instead, we would need to reform price setting or related to how patient payments are set.” – Stacie B. Dusetzina, Associate Professor Health Policy, Vanderbilt University Medical Center, 5/8/19
The Trump administration counters with the sketchy argument that the disclosures on television will compel patients to sit down and talk to their doctors about cheaper alternatives, supposedly putting pressure on Big Pharma to reduce prices. But talking to one’s doctor is not going to do the trick. Nor is switching to cheaper drugs always advisable for patients with chronic or serious diseases.
“Democrats say measures like price disclosure won’t force drugmakers to lower what they charge, and they want Medicare to negotiate on behalf of customers.” – NBC NEWS, 5/8/19
HHS must be able to exercise the power to negotiate drug prices with Big Pharma through the Medicare program. After all, who has more leverage – individual patients?… or the pharmaceutical industry’s biggest customer, the federal government?
The National Committee supports legislation in Congress to allow Medicare to negotiate prices directly with drugmakers. In February, Rep. Lloyd Doggett (D-TX) and Senator Sherrod Brown (D-OH) reintroduced their Medicare Negotiation and Competitive Licensing Act.
The legislation would authorize the Secretary of Health and Human Services (HHS) to negotiate drug prices. If drug companies refuse to negotiate in good faith, the bill would enable the Secretary to issue a competitive license to another company to produce the medication as a generic. – Statement from the office of Rep. Lloyd Doggett, 2/7/19
Unfortunately, the Trump administration does not support this proposal, preferring to offer ‘weak tea’ alternatives that won’t ruffle Big Pharma’s feathers too much. Meanwhile, the American people continue to suffer under a regime of sky-high drug prices. A recent Kaiser Family Foundation survey found that 60% of all respondents with chronic conditions had not filled a prescription or skipped doses during the past year. The figure jumped to 75% for patients with the highest insurance deductibles. We’ve heard the stories of seniors cutting pills in half – or having to choose between groceries and medicine – because drug prices are especially unaffordable for people on fixed incomes.
“Let’s cut prices so that patients don’t have to cut pills in half,” said Congressman Doggett in February. “Our proposal responds to an American problem, rampant prescription price gouging, with an American solution—negotiation and competition.”
Join the discussion about drug pricing information in tv ads on Facebook Live.