Thursday was a historic day in the movement to lift the burden of crushing prescription drug prices. The U.S. House passed H.R. 3 – The Lower Drug Costs Now Act – which, among other things, empowers Medicare to negotiate prices directly with drug makers. H.R. 3 also delivers a sorely-needed, $2,000 annual cap on out-of-pocket drug costs for Medicare Part D beneficiaries. The bill then leverages the projected $456 billion in savings from lower drug prices to expand Medicare to include dental, vision, and hearing coverage – a long-sought goal of the National Committee and other seniors’ advocates. Lowering prescription prices is the objective of the National Committee’s Don’t Cut Pills, Cut Profits campaign.
“The U.S. House of Representatives resoundingly defied Big Pharma on Thursday by passing historic legislation to lower prescription drug prices for America’s seniors and their families. The Lower Drug Costs Now Act relieves two sources of financial pain inflicted on older Americans – soaring drug prices and unaffordable out-of-pocket expenses for the care of their eyes, ears, and teeth.” – Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare, 12/12/19
Under H.R. 3, the Department of Health and Human Services would be authorized to negotiate the prices of up to 50 prescription drugs every year, using the prices that other Western countries pay as a benchmark. Drug makers who refuse to negotiate within the bounds of the legislation would face significant financial penalties. The National Committee has fought for Medicare cost negotiation since the creation of the Part D drug benefit in 2003, believing that the government could harness the bargaining power of millions of Medicare beneficiaries to beat prices down.
The bill’s $2,000 out-of-pocket cap on Medicare Part D beneficiaries’ prescription drug costs represents a significant improvement over current law. Today, some one million Part D enrollees pay more than $3,200 in annual out-of-pocket costs. Roughly one quarter of American adults say they have had to leave prescriptions unfilled, ration pills, or forgo other necessities because of soaring out-of-pocket drug costs. At town halls held this fall, the National Committee has heard harrowing stories of seniors who couldn’t afford crucial medications for conditions including diabetes, heart disease, and cancer.
H.R. 3’s addition of dental, hearing, and vision coverage to traditional Medicare is excellent news for seniors who have had to foot the full cost of care for their eyes, ears, and teeth. Under the new legislation, Medicare would cover:
*50% of eligible dental care costs
*Hearing aids and care for severe hearing loss
*80% of eligible vision care costs (including eyeglasses and contact lenses)
While the passage of H.R. 3 demonstrates the Democrats’ commitment to lowering drug prices and expanding Medicare, its chances of being signed into law – in current form, at least – are slim. Republicans in the House and Senate have slammed the bill, calling it a “government takeover” of the prescription drug market, even though H.R. 3 would work within the existing market to bring prices into line with what other countries pay. And, as Democrats have pointed out, price negotiation is fundamental to a functional free market.
The Senate Finance Committee has approved a drug price reduction bill introduced by Senators Charles Grassley (R-IA) and Ron Wyden (D-OR), but majority leader Mitch McConnell has not indicated he will bring it to the Senate floor for a vote.
The Trump administration has signaled its support for the Grassley-Wyden bill, but President Trump has yet to make an outright endorsement – the kind which might compel the full Senate to vote on it. If Grassley-Wyden were to pass the Senate, a House-Senate conference would have to reconcile the differences between each chamber’s prescription drug pricing legislation.
Democrats will incorporate the passage of H.R. 3 into their 2020 campaign messaging, validating their promises to voters to cut skyrocketing drug costs and improve Americans’ health coverage. Meanwhile, seniors and their families can celebrate the House majority’s affirmation that they badly need relief from high drug prices – and look forward to a time when the provisions in H.R. 3 can finally become law.
The 2020 Medicare open enrollment has ended — and it has not been the program’s finest hour. The Trump administration’s new online enrollment tools have been rightly criticized as inaccurate, misleading, and sometimes downright biased toward private plans.
A few days before open enrollment deadline of December 7th, the Centers for Medicare and Medicaid Services indicated that, because its online tools are riddled with errors, beneficiaries may be able to change their plans during a “special enrollment period” after the normal deadline.
“Saturday is the deadline for most people with Medicare coverage to sign up for private drug and medical plans for next year. But advocates worry that enrollment decisions based on bad information from the government’s revamped, error-prone Plan Finder website will bring unwelcome surprises.” – Kaiser Health News, 12/5/19
Advocates, including the National Committee, have criticized the administration’s newly revamped Plan Finder for misleading information about pricing and plans – and a continued “tilting of the playing field” toward private Medicare Advantage plans over traditional Medicare for ideological, rather than practical, reasons.
Last week, our president and CEO, Max Richtman, penned an opinion piece in Marketwatch calling the administration to account on this issue.
“Traditionally, Medicare enrollment materials have been neutral regarding the two basic types of coverage. But starting in 2018, advocates noticed that the public outreach seemed to steer enrollees toward Medicare Advantage by overemphasizing the positives of private plans while downplaying the negatives, and limiting — or outright omitting — references to traditional Medicare.” – Max Richtman, National Committee president and CEO, Marketwatch, 11/29/19
While enrollees await specifics as to what kind of changes they may be able to make to their chosen plans after open enrollment ends, the administration says it is continuing to “improve” the Plan Finder. But, as Kaiser Health News points out, many beneficiaries may not even realize that they signed up for the wrong plans until their coverage begins next year.
Read Max Richtman’s full Marketwatch article on bias in the Trump administration’s Medicare enrollment tools here.
Historic legislation to reduce prescription drug prices will come up for a vote in the U.S. House next week. Speaker Nancy Pelosi announced today that the Elijah E. Cummings Lower Drug Costs Now Act will reach the House floor as early as Tuesday. The bill, otherwise known as H.R. 3, would empower the Secretary of Health and Human Services to negotiate lower drug prices with Big Pharma on behalf of the millions of Americans in the Medicare program. The legislation represents the biggest change to Medicare since its inception in 1965.
“We are going to give Medicare the power to negotiate lower drug prices, and make those prices available to Americans with private insurance as well as Medicare beneficiaries. American seniors and families shouldn’t have to pay more for their medicines than what Big Pharma charges in other countries for the same drugs.” – Speaker Nancy Pelosi, 12/5/19
Through its “Don’t Cut Pills, Cut Profits” campaign, the National Committee has been fighting to lower drug prices, which have become a crushing financial burden for retirees living on fixed incomes – and working Americans at large. Soaring prescription prices contribute to Americans’ health insecurity, help drive the middle and working classes into medical bankruptcy, and compel them to forgo necessary medications.
An analysis by AARP last August revealed that nearly a third of pre-Medicare age adults are rationing pills, skipping doses, or simply not filling necessary prescriptions due to skyrocketing costs. Eight in ten Americans say drug prices are too high, with a majority blaming pharmaceutical company profits for unaffordable medications. A 2019 Kaiser Family Foundation study found that more than 80% of Americans (across party lines) favor aggressive government intervention to lower prices. Eight-six percent of those surveyed supported allowing Medicare to negotiate directly with drug makers – the very centerpiece of H.R. 3.
The bill includes:
A $2,000 cap on seniors’ Medicare out-of-pocket costs for prescription drug spending
A mechanism for the Medicare program to negotiate drug prices with manufacturers with a strong enforcement penalty to compel manufacturers to offer fair prices
An inflation cap on drug reimbursement to curb excessive and unwarranted drug price escalation
The House is expected to pass H.R. 3. On the Senate side, a bipartisan bill to reduce drug prices introduced by Senators Ron Wyden (D-OR) and Charles Grassley (R-IA) has been passed out of committee. The Grassley-Wyden bill – which is undergoing changes to win wider support in the Senate – contains provisions similar to those in H.R 3, but does not include Medicare price negotiation.
It’s uncertain whether Grassley-Wyden will reach the Senate floor. If the bill does pass by the Senate, a conference committee would have to reconcile the differences between Grassley-Wyden and the House legislation. One thing is certain: bipartisan majorities of Americans expect their elected leaders to take forceful action to relieve the pain of high drug prices, and will be rightfully angry if they don’t.
For more on this topic, watch “Behind the Headlines” on Facebook Live.
With a little more than a week left of the 2020 Medicare open enrollment season, the Trump administration continues drawing fire for its revamped online tools. On Monday, ProPublica published a scathing report highlighting misleading and inaccurate information on the Medicare Plan Finder. Many of the problems involve prescription drug plans, making it harder for seniors to make optimum choices that take into account not only premium prices, but out-of-pocket costs – which can run in the thousands of dollars, if not more.
One Medicare consultant conducted a test on the Plan Finder tool as if she were an enrollee, and found two versions of the same blood pressure medication on a single plan. One of the medications was covered by the plan, the other was not. The difference in cost was a whopping $2,700 per month. That is only one of myriad errors that can confuse beneficiaries and increase their costs.
“Advocates for seniors worry that the full weight of the tool’s inaccuracies will not be felt until the 2020 coverage year begins and seniors head to pharmacies to fill prescriptions or show up for medical appointments. For many Medicare participants, selections made during open enrollment are irreversible.” – ProPublica, 11/25/19
The Plan Finder is causing confusion across the country. The Associated Press reported Tuesday that Delaware’s insurance commissioner took the rare step of issuing a consumer alert to warn beneficiaries about the tool’s inadequacies.
“The tool is supposed to help find and compare Medicare coverage options, but (it) focuses on premium costs that ‘deflect focus from higher personal costs.’ The tool also shows plans that don’t cover certain medications if residents enter multiple prescriptions… (and) organizes options by lowest premium cost instead of lowest annual costs.” AP/WBOC-TV, 11/26/17
The Centers for Medicare and Medicaid Services (CMS) re-designed the Plan Finder for the first time since 2005, citing necessary software and functional upgrades. CMS spent $11 million to revamp the tool, which consumers complain is not working as it should – and may be, in fact, working against the best interests of beneficiaries. CMS also says that it’s updating the tool as complaints come in.
The rollout of any large, new online tool can be problematic. The Medicare Plan Finder is not the first to have bugs. But digging deeper, some of these issues seem to stem less from expected technical glitches and more from a certain ideological bias.
Since at least 2018, the Trump administration has been tilting the playing field toward private Medicare Advantage plans over traditional Medicare. In both print and online materials, CMS presents enrollee information in a way that makes Medicare Advantage seem like a better deal. As David Lipschutz of the Center for Medicare Advocacy noted, CMS enrollment materials have characterized Medicare Advantage as “less expensive by default” and listed “prior authorizations” for certain types of care as a “benefit,” rather than an impediment, for patients.
While Medicare Advantage plans can have lower premiums, they offer a limited network of physicians and other providers. Claims can be denied with limited opportunity for appeal. Let’s not forget those troublesome prior authorizations that come with many managed care plans. What’s more, private plans often change their pricing and coverage in ways that are hard for consumers to track – even harder if enrollment materials are inaccurate.
In the face of the Trump administration’s apparent bias toward private Medicare plans, the National Committee and other seniors’ advocates are sounding the alarm:
“We have called upon the administration to level the playing field between traditional Medicare and MA plans. Instead, the President issued an executive order in October effectively doubling-down on that bias. The executive order requires federal agencies to examine regulations and practices to make sure that traditional ‘Medicare is not advantaged or promoted over [Medicare Advantage] with respect to its administration.’ In other words, the executive order aims to solve the exact opposite problem of the one that really exists.” – Max Richtman, National Committee President and CEO, 11/25/19
The National Committee has teamed up with the Center for Medicare Advocacy to provide the public with objective, accurate information about enrollment options. The Medicare Fully Informed Project offers enrollees a variety of educational tools. Unlike the administration, our goal is not to steer enrollees toward one program or the other, but to make sure they are positioned to make the best possible choices for their own health.
Sen. Ron Wyden (D-OR) headlined a spirited town hall on prescription drug pricing Friday in Portland as part of the National Committee’s “Don’t Cut Pills, Cut Profits” campaign. A capacity crowd of local seniors attended the event at Portland Community College, featuring Senator Wyden, Congressman Earl Blumenauer (D-OR), Oregon state reps. Andrea Salinas and Rachel Prusak, and policy experts from the National Committee and AARP Oregon, which cosponsored the event. The town hall was moderated by National Committee president and CEO Max Richtman.
“Drug prices and out-of-pocket costs paid by seniors have soared, forcing some older Americans to go without needed medications, cut pills and skip doses – or even choose between paying for medicine and groceries. Fortunately, the elected leaders at this town hall are working hard to right this wrong.” – Max Richtman, 11/8/19
The town hall coincides with intensifying efforts in Congress to pass meaningful drug price reduction legislation. Sen. Wyden, the ranking member on the Senate Finance Committee, co-authored a bipartisan bill that would combat prescription price gouging by Big Pharma. Rep. Blumenauer is a key supporter of legislation in the House (H.R. 3) – backed by Democratic leadership but opposed by Republicans – to allow Medicare to negotiate the price of drugs with pharmaceutical companies (among other provisions).
Sen. Wyden conceded that the House legislation goes further than his bill in the Senate, the Prescription Drug Pricing Reduction Act, which he and Republican Senator Charles Grassley (R-IA) introduced last summer. “It’s not the bill I would have written, folks. But it’s a good start,” Wyden told the town hall audience.
Grassley-Wyden would cap drug prices in Medicare Part D according to consumer inflation levels, slapping penalties on drug makers who fail to comply. Sen. Wyden calls it “the first ever legislated cap on prescription price gouging.” According to the Congressional Budget Office, the bill would save Medicare beneficiaries $27 billion in out-of-pocket drug costs.
The bipartisan Senate bill also imposes a cap on out-of-pocket costs for Medicare Part D patients, which Sen. Wyden called a “peace of mind provision.”
“This ‘peace of mind provision’ means you won’t lose your home over drug prices. We set a cap on the annual amount you pay for prescription drugs, somewhere in the vicinity of $2,000. No one’s going to lose their home because of the price of medicine.” – Sen. Ron Wyden at the National Committee town hall, 10/8/19
Congressman Blumenauer told seniors at the town hall that even if Grassley-Wyden and the House bill do not pass during this session of Congress, they lay down major markers in the fight against Big Pharma price gouging. “We are keeping this issue alive, building momentum, and putting the heat on politicians to be accountable for these policies,” he said.
Rep. Blumenauer also shot down Big Pharma’s claims that price reductions would harm the research and development of new medicines. The pharmaceutical industry spends billions each year on marketing and advertising that could be put into R&D, much of which is funded by the federal government.
“Let’s call Big Pharma’s bluff: they don’t have to pick the pockets of American consumers in order to have research. We pay the highest prescription drug prices in the world. Half of the prescriptions written are never filled or completely taken… If we’re able to bring the prices down so that people could afford their prescriptions, they’d be in better health.” – Rep. Earl Blumenauer at the National Committee town hall, 10/8/19
According to AARP, the annual average cost of prescription drugs overall increased nearly 60% between 2012-2017, while Oregonians’ income increased only 14.8%. In 2017, nearly one quarter of the state’s residents rationed pills or skipped medications altogether. Oregon seniors who have suffered the consequences of soaring drug prices shared their stories at the Portland town hall.
“Because of the high price of prescription drugs, I am afraid of a lien being placed on our family home.” – Shirley M., Portland, OR
“I chose the provider who charges the least amount of money, and still had to refuse a medication my doctor prescribed because of cost.” – Rose B., Milwaukie, OR
“I am a diabetic and struggle to afford insulin.” – Maryanne W., Aloha, OR
Senator Wyden railed against the skyrocketing cost of insulin during the town hall:
“Insulin is taken by thousands and thousands of Oregonians. The prices have gone up in recent years thirteen-fold and the drug is not 13 times better! It’s basically the same drug as insulin has been for decades. Why does this go on? Because the drug companies can get away with it!” – Sen. Ron Wyden, National Committee town hall, 11/8/19
Oregon lawmakers Salinas and Prusak called the audience’s attention to measures in the legislature to combat rising drug prices on the state level. Last year, Oregon passed a transparency law requiring drug-makers and health insurance companies to report price increases to the state’s Department of Consumer and Business Services.
In addition to Senator Wyden, Rep. Blumenauer, and the two state legislators, the town hall featured AARP Oregon Director Ruby Haughton-Pitts, AARP N/NE Portland Chapter President Judy Knawls Boyer, AARP Manager of Federal and State Voter Engagement Khelan Bhatia, and National Committee policy advisor Lisa Swirsky.
“The town hall was an unqualified success,” says National Committee legislative director Dan Adcock. “The audience was engaged and interested. There were good questions and compelling stories. People were glad to hear the latest on prescription drug pricing from key players on Capitol Hill and their own state legislators.”
The National Committee’s Don’t Cut Pills, Cut Profits campaign educates and empowers older Americans to help exert pressure on elected leaders to reduce prescription drug prices. The Portland town hall was preceded by an event in Milwaukee, Wisconsin on October 11th and will be followed by another in Lansing, Michigan on December 9th.