While Turing Pharmaceuticals Martin Shkreli’s decision to raise the cost of a drug 5,000% certainly got a lot of attention earlier this year, the fact that the high cost of prescription drugs in America continues to soar beyond the reach of many isn’t news to anyone who’s made a trip to the pharmacy lately. In fact, a Kaiser Family Foundation poll found a large majority of the public (72%) view the cost of prescription drugs as unreasonable.
The federal Health and Human Services Department has signaled they’re looking for a way to curb rising prescription drug prices. They need to do so because rising drug costs have now overtaken a long stretch of stable premiums. In other words, while Medicare has successfully controlled premiums those successes are lost when seniors in Part D continue to face growing prescription costs.
“Andy Slavitt, acting administrator for the Centers for Medicare and Medicaid Services, said his agency spent $140 billion on prescription drugs and that spending on medicines increased 13 percent in 2014 while overall health spending grew 5 percent.” ....HHS Airs Concerns About Rising Drug Prices, Congressional Quarterly
“Spending on medicines increased 13 percent in 2014, compared to 5 percent for health care overall, Slavitt said. It was the highest rate of drug spending growth since 2001.”...Obama administration sets stage for a debate on drug costs, Associated Press
One simple solution is to allow Medicare to negotiate prices for prescription drugs which could save the program and its beneficiaries billions of dollars.
“The law that established Medicare Part D explicitly prohibits the prescription drug program from negotiating lower drug costs for beneficiaries. The major pharmaceutical companies adamantly defend this rule, contending that the higher prices are necessary to support the industry’s investment in research and development. However, a comparison of the prices paid by Part D with those paid by the Department of Veterans Affairs (VA) and other agencies shows that Part D could save billions of dollars through the use of additional negotiation techniques. Our analysis finds that the VA attains drug prices that, on average, are 48 percent lower than Part D plan prices for the top 10 drugs covered by the program.” ...”Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,” NCPSSM Issue Brief
It’s time to hold America’s drug makers accountable.
“Heather Block, a breast cancer patient from Lewes, Delaware, told the forum that her costs have been so high she could face bankruptcy if she beats the odds against her advanced disease. ‘Innovation is meaningless if nobody can afford it,’ she said”... Associated Press
Passing a budget in Washington these days is uglier than making sausage. The next step (now underway), when Congressional appropriators actually decide where to spend those budgeted dollars, may be even worse.
As a reminder, the 2016 budget deal passed last month was far from perfect; however, it did:
· Prevent a 19% cut in Social Security Disability Insurance benefits that would have occurred in late 2016
· Mitigate a 52% Medicare Part B premium increase for 30% of Medicare beneficiaries
· Alleviate an increase in the Part B deductible for all beneficiaries, lowering it from a projected $223 to $167
The budget deal also provided for a roughly $33 billion increase in domestic programs. Many, like Older Americans Act programs, have been devastated by the sequester so loosening that budget noose should have been good news.
However, Congressional conservatives have very different ideas than Democrats of where those extra budget dollars should go. In a classic “guns vs. butter” battle, GOP appropriators propose less for domestic programs, like the Older Americans Act, and $8 billion more for the nondefense war account beyond the increase already requested by the President. According to Congressional Quarterly:
“Connecticut Democrat Rosa DeLauro, ranking member of the House Labor-HHS-Education Appropriations Subcommittee, on Tuesday slammed the new, post-budget-deal allocation for the spending bill she helps oversee, which typically accounts for roughly one-third of all nondefense discretionary spending.
DeLauro said the revised discretionary allocation for Labor-HHS-Education is $5.2 billion above the fiscal 2015 enacted level (PL 113-235) of $156.76 billion, or roughly $161.69 billion. She said the bill should receive an increase of closer to $10 billion above the enacted level. The budget accord provided a roughly $33 billion increase to domestic programs above the sequester level, when a roughly $8 billion increase to the nondefense war account beyond the president’s request is included.
“I’m opposed to the allocation. The recent allocation is well below the percentage that Labor-H should have, given that Labor-H is 32 percent of the nondefense discretionary dollars,” DeLauro said.”
The Older Americans Act is the backbone of the nation’s home and community supports system, helping older adults age with independence and dignity by providing them with much-needed in-home support, meals, transportation, caregiver assistance and ombudsman programs to help protect residents in nursing homes.
The Leadership Council of Aging Organizations, chaired by NCPSSM, is mobilizing Americans to call their members of Congress and ask them to do more, not less, for the growing number of older Americans by protecting aging services and increasing funding for the Older Americans Act and Elder Justice programs. Our seniors are counting on them.
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There is a lot at stake in the 2016 election because the differences between candidates’ plans for #SocialSecurity, #Medicare and Medicaid are stark. Seniors' votes will make a difference so please help us advocate, educate and keep the candidates accountable for their positions on America's most successful programs!
Senator Elizabeth Warren (D-MA) has introduced legislation, cosponsored by a host of Democratic Senators and supported by us here at the National Committee, to send every senior citizen and disabled veteran in America a check for $580. The “SAVE Benefits Act” follows the announcement last month that beneficiaries would not receive any COLA increase next year.
Senator Warren describes her legislation this way:
“Although the cost of core goods and services is projected to rise next year, millions of Americans will see no increase in the benefits they rely on to make ends meet. Meanwhile, CEO compensation for the top 350 firms increased by 3.9 percent last year. The Seniors and Veterans Emergency Benefits Act (SAVE Benefits Act) would give about 70 million seniors, veterans, people with disabilities, and others an emergency payment equal to 3.9 percent of the average annual Social Security benefit, about $581 - the same percentage raise as the top CEOs.
A $581 increase could cover almost three months of groceries for seniors or a year's worth of out-of-pocket costs on critical prescription drugs for the average Medicare beneficiary. The bill would lift more than 1 million Americans out of poverty. The cost of this emergency payment would be covered by closing a tax loophole allowing corporations to write off executive bonuses as a business expense for "performance pay." The substantial additional revenue saved by closing the CEO compensation loophole would be used to bolster and extend the life of the Social Security and Disability trust funds.”
For seniors who continue to see their costs increase, particularly their healthcare, news that there would be no COLA increase in 2016 makes no sense. It highlights the need to adopt a more accurate measure of seniors’ true expenses through the adoption of a CPI for the elderly (CPI-E).
“The current Social Security COLA formula isn’t accurately measuring seniors’ expenses. Seniors across this nation understand how important having an accurate measure of the increase in their real costs is to their day-to-day survival. While there has been a lot of talk in Washington about the need to find a more accurate COLA formula; unfortunately, that attention has largely focused on ways to cut the COLA even further. Leaving many Americans to wonder what’s less than zero? If accurate inflation protection for seniors is truly our goal, Congress needs to adopt a fully developed CPI for the elderly (CPI-E). Until then, we urge Congress to act quickly to mitigate the devastating Medicare hikes headed for millions of Americans who can’t afford them.” ...Max Richtman, NCPSSM President/CEO
Senator Warren talked about why seniors need this legislation on “All In” with Chris Hayes.
America’s seniors, people with disabilities and their families who depend on Social Security have legitimate reason to be scared whenever Congress starts cutting backdoor deals because they know from experience that Social Security, Medicare and Medicaid have been used as piggy banks or political hostages by GOP leaders always looking for ways to cut benefits.
The good news is, contrary to claims by largely financial writers, Social Security benefits were not cut in this week’s Congressional Budget deal.
We take on one of the seriously flawed stories in NCPSSM’s “Equal Time”:
“Proposed budget bill would have devastating effects on millions’ Social Security benefits”, Laurence Kotlikoff, PBS Columnist
“...the new budget drastically cuts Social Security benefits for many of those now collecting, drastically cuts benefits for many of those who were about to collect, exacerbates Social Security work disincentive and induces households to do exactly the wrong thing, namely take their benefits too early at the cost of permanently lower benefits.”
In a column loaded with scary and inflammatory rhetoric describing Congress’ budget deal as “devastating,” “radical,” and “truly draconian,” Laurence Kotlikoff does his readers and especially Social Security beneficiaries a huge disservice by presenting changes that impact a tiny percentage of Americans as something much larger. At issue is a little-used benefit strategy called File and Suspend. The Budget deal modifies this practice and fixes the unintended consequences (the Social Security Actuary calls it a loophole) in a 2000 Social Security law that allows retirees to file for Social Security and then suspend receipt of their benefits to maximize their Social Security payout. Under the Budget deal, the tiny percentage of beneficiaries (estimated to be about 100,000 people) who’ve used this strategy will be allowed to continue to do so. Their benefits will not be cut. However, Congress is changing this claiming practice for the future. Spouses, divorced spouses, the disabled and children will still quality for their regular earned Social Security benefits much as they have in the past. As the co-author of a how-to book advising people on ways to use “aggressive claiming strategies,” there’s no surprise Kotlikoff finds this provision frustrating; however, these changes are far from “reneging” on Social Security’s promise as claimed in his piece.
The National Committee does not support the Congressional majority’s continuing use of Social Security as a bargaining chip in budget negotiations. However, it’s vital that Americans receive the full story about Congressional action on Social Security, including who is truly affected and in what ways. The Congressional budget deal does not cut benefits and will not harm millions of people, contrary to what was reported by PBS.
The Economic Policy Institute also provides this description of the file and suspend change:
“Eliminating “aggressive Social Security-claiming strategies, which allow upper-income beneficiaries to manipulate the timing of collection of Social Security benefits in order to maximize delayed retirement credits” was something the president included in his fiscal-year 2015 budget, not something the administration reluctantly agreed to. And most advocates, including the Social Security Works coalition, to which EPI belongs, think it’s a loophole that needs to be closed, since the purpose of the delayed retirement credit is to equalize lifetime benefits, not to give savvier beneficiaries who can afford to delay take-up a little something extra. The dissidents counter that a benefit cut by any other name is still a benefit cut, and say it’s a strategy that can help divorced women, who can be particularly vulnerable in retirement.
The dissidents make a strong case with feminist appeal. But it’s still double dipping even if a few people who take advantage actually need a larger benefit. In the end, it all seems a distraction from the benefits of the agreement, which include averting large benefit cuts to disabled beneficiaries.”
The budget agreement will benefit literally millions of Americans in Medicare and Social Security yet conservatives are up in arms claiming that Speaker Boehner gave away too much (as if preventing massive disability benefits cuts, Medicare hikes and government default are bad things).
Specifically, this Budget Deal:
- Prevents a 19% cut in Social Security Disability Insurance benefits that would have occurred in late 2016
- Ensures 7 years of certainty that the Social Security Disability insurance program will pay full benefits
- Mitigates a 52% Medicare Part B premium increase for 30% of Medicare beneficiaries
- Alleviates an increase in the Part B deductible for all beneficiaries, lowering it from a projected $223 to $167
- Provides sequester relief to programs like the Older Americans Act, Low Income Home Energy Assistance Program and Social Security field offices.
This Budget Deal is good news for seniors but it’s far from perfect. Unfortunately, the bill also:
- Provides NO financial relief to seniors who will receive no cost of living adjustment in 2016.
- Extends the Medicare provider reimbursement sequester and uses the savings to pay for unrelated programs.
Lastly, let’s make it clear that the biggest problem with the Budget Deal is that Congressional leadership continues to use middle-class benefits as hostages to try and force concessions on legislation that has nothing to do with Social Security, Medicare or Medicaid.
With a new House Speaker, Rep. Paul Ryan, now in charge (and his views on slashing Social Security and turning Medicare into CouponCare are well known) we’ll likely face this battle again as soon as next month in the Transportation bill debate as conservatives hope to use benefit cuts to pay for highways.
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