Medicare Part D prescription drug beneficiaries can be in for a rude surprise after they sign up for coverage.  In an article this week in Kaiser Health News, Susan Jaffe writes that the price of a drug may jump within a month of a patient enrolling in a Part D drug plan.  She cites the case of Linda Griffith, a California woman who used Medicare’s plan finder to select coverage last December, only to find that the price of one of her medications had jumped from $70 to $275 by January.

“As early as three weeks after Medicare’s drug plan enrollment period ends on Dec. 7, insurance plans can change what they charge members for drugs — and they can do it repeatedly.” – Kaiser Health News, 5/3/22 

In fact, an AARP analysis found that the prices for the 75 most frequently prescribed drugs for Medicare beneficiaries climbed by as much as 8% between the end of December 2021 and the end of January 2022.

If this sounds like a bait-and-switch, the Centers for Medicare and Medicaid Services says that is just the way our current drug pricing system works. According to Medicare’s website, “Your plan may raise the copayment or coinsurance you pay for a particular drug when the manufacturer raises their price, or when a plan starts to offer a generic form of a drug,”  

“I want my money back, and I want to be charged the amount I agreed to pay for the drug… I think this needs to be fixed because other people are going to be cheated.” – Linda Griffith, Medicare Part D beneficiary (Kaiser Health News) 

Fixing the problem would require a change in the law.  The 2003 Medicare Modernization Act, passed during the George W. Bush administration, established Part D drug coverage (to be provided by private insurance companies like Humana, Aetna, and Cigna), but forbade Medicare from negotiating prices with Big Pharma.  NCPSSM President and CEO Max Richtman recently told CNBC that the ban on price negotiation “was put in in the middle of the night. We were not in the room when that deal was made.”  

For many years, the National Committee to Preserve Social Security and Medicare and other seniors’ advocates have fought for new legislation empowering Medicare to negotiate prices. That goal finally seemed within reach when Congress took up President Biden’s Build Back Better plan, which contained a Medicare price negotiation provision. 

The House-passed version of the bill would have allowed negotiations for a limited number of drugs. It wasn’t everything that advocates had hoped, but it would have been a good start. In the end, the Build Back Better plan failed to garner enough support in the Senate, due largely to the opposition of Senator Joe Manchin (D-WV). 

Though Medicare price negotiation would be the single most effective way to lower seniors’ drug costs, other solutions have been percolating on Capitol Hill.  These include an out-of-pocket cap on Part D drug costs and limiting drug price increases to the rate of inflation. All of these proposals have garnered the support of wide majorities in public opinion surveys. A 2021 Kaiser Health News poll found 83% of the public — including majorities of Democrats and Republicans —favored the federal government negotiating lower drug prices for both Medicare and private insurance. 

Unfortunately, Big Pharma has used its multi-billion dollar lobbying and advertising arsenal to kill meaningful drug price reform so far.  Some lawmakers apparently feel more beholden to drug makers than to their constituents, many of whom are skipping life-saving medications they can’t afford. Until Congress musters the political will to take another run at reform, the industry will continue to raise prices at will – leaving everyday Americans like Linda Griffith scrambling to cover the costs.