News of a deal between Senators Joe Manchin and Chuck Schumer for a broader reconciliation package including climate, inflation, and prescription drug reform measures is good for seniors. All three issues touch older Americans’ lives, though the health care provisions in the new deal are not radically different than the ‘skinnier’ version that the two Senators agreed upon earlier this month.

The measures that most directly help seniors in the current deal are:

*Empowering Medicare to negotiate the price of certain medications with Big  Pharma 

*A $2,000 cap on out-of-pocket costs for Medicare Part D beneficiaries 

*Rebates to be paid by drug companies if they raise prices higher than the rate of inflation 

While the latest reconciliation bill is far less ambitious than the original Build Back Better plan that took shape in 2021 (until Senator Manchin withdrew his support), these improvements for seniors are no small matter. In fact, advocates have been fighting for prescription drug price reform for years.

Most importantly, the bill would undo one of the most objectionable provisions of the legislation that created the Medicare Part D drug benefit back in 2003:  the law actually forbade the government from negotiating prices with drug makers. Ever since then, the National Committee has been urging Congress to allow drug price negotiation.  This legislation represents the first potential piercing of the barrier erected by the 2003 law.

While the number and type of drugs whose prices would be negotiated is limited in the new bill, the measure is “the camel’s nose under the tent” that seniors’ advocates have been looking for. And that is why Big Pharma has vigorously opposed any price negotiation with Medicare, no matter how limited.

“The industry is frightened by this (potential) cracking of the ceiling allowing at least some price negotiation when the law has forbidden it since 2003.  That’s a long way to come in 20 years.” – Maria Freese, senior policy analyst at the National Committee to Preserve Social Security and Medicare, 7/29/22  

The out-of-pocket cost cap for Medicare Part D beneficiaries would also be a significant step. Some seniors with serious health conditions (both chronic and acute) currently face exorbitant out-of-pocket prescription drug costs. Nearly 1 in 4 Americans say they have problems affording their medications.

“Today, there is no cap on spending for prescription drugs seniors buy from pharmacies. This proposal ensures that devastating diagnoses, like cancer, will never again mean paying tens of thousands out of pocket for just one drug.” – Senate Democrats, 7/28/22  

Capping those out-of-pockets to $2,000 per year, as the proposed reconciliation bill does, would be another big win for older Americans – along with penalizing Big Pharma for hiking prices higher than the rate of inflation.

The Senate is expected to vote on the reconciliation bill during the week of July 31st,, providing that it passes muster with the Senate parliamentarian and that there are no objections from any Democratic Senators.  The House may return to take up the bill in mid-August. Of course, success has seemed to be at hand in the past, only to have a deal collapse at the last minute. Time for action is running short.

“Democrats know that this bill is probably the only one they’ll be able to pass over Republicans’ objections, potentially for the rest of Biden’s presidency, if Republicans take back one or both chambers of Congress this fall.” – Washington Post, 7/29/22 

There is some incidental symbolism to the timing of the new bill, as well.  The Medicare program turns 57 years old on July 30th. As our president and CEO, Max Richtman writes in Common Dreams, with zero Republican support for the reconciliation bill, it falls to Democrats to improve Medicare, one of the party’s most significant legacies. “As we mark this 57th anniversary, let’s re-commit to protecting (and expanding) this tremendous pillar of the Great Society.”