The Cost-Saving Proposal That Costs Seniors $2,000 a Month

A Trump administration proposal designed to cut prescription drug costs could actually see some seniors paying $2,000 more each month out of their own pockets, a new study published in the Journal of the American Medical Association suggests.

A year ago, as part of his 2019 budget proposal, President Trump requested authority to shift certain drugs from Medicare Part B to Medicare Part D to save money.  Drugs covered by Medicare Part B are typically infused or injected in a doctor’s office or hospital. They include innovative biologics and chemotherapy drugs, among others.  Drugs covered by Part D, Medicare’s prescription drug plan, can be picked up at the local pharmacy and taken at home.

More detail – and more questions – about the concept emerged with the release of “American Patients First,” the administration’s blueprint to lower drug prices.  But now, a new analysis reveals the plan to shift drugs from Part B to Part D may not work as intended.

That’s because a majority of seniors use supplemental coverage, called Medigap, to help cover their Part B out-of-pocket costs.  This helps seniors keep medicine costs manageable on a fixed or modest monthly budget. If their medicines move to Part D, however, their supplemental coverage no longer applies.  And their out-of-pocket costs could go up.

These new data compound existing access concerns about the proposed change.  A major concern remains that the private insurers that administer Part D prescription drug programs dictate which drugs are covered – and which are not.

In addition to restrictive formularies, Part D plans can limit medication access by imposing burdensome utilization management policies like prior authorization.  Patients may also experience delays as they suffer through step therapy, failing first on cheaper, plan-preferred alternatives before being allowed to start their physician-prescribed treatment.  

By moving Part B drugs to Part D, therefore, the administration’s proposal could also increase the number of seniors subjected to these access barriers.  That includes seniors who depend upon Part B drugs to treat life-threatening conditions such as cancer and debilitating disease such as rheumatoid arthritis.

Experts arrived at the idea of moving Part B drugs to Part D by comparing the current cost of 75 brand-name drugs under Part B with their anticipated cost under Part D, estimating the change would save the government up to $20.1 billion.  But mounting concerns suggest not all seniors would welcome the change. For some, the increased out-of-pocket costs could make their medicine unaffordable. And the risks, and costs, of medication non-adherence could end up costing everyone more in the end.

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