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As individuals and families grapple with rising prices, there is one category that has risen faster than inflation: prescription drugs.
Now, the new Senate reconciliation bill introduced by Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Joe Manchin, DW.Va., aims to help Americans relieve- if the rising costs of health.
The Senate proposal includes significant reforms such as allowing Medicare to negotiate prescription drug prices and setting limits on those price increases, according to Tricia Neuman, senior vice president and executive director of the Medicare policy program at KFF, a non-profit organization for-profit focused on national health issues.
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It also includes a $2,000 out-of-pocket limit that would provide relief to Medicare beneficiaries who take high-priced prescription drugs.
“This is really the first time since 2010 that Congress has moved forward on any legislation to substantially improve drug coverage for people on Medicare,” Neuman said.
In particular, the legislation would also limit drug price increases for people with private insurance.
The proposal is expected to be considered by the Senate next week once the parliamentarian gives the go-ahead so that the provisions of the package can be moved by a Democratic majority.
The proposal is very similar to a bill passed by the House, according to Neuman, who will consider the Senate version once it passes. Some House Democrats already expressed strong support for the bill this week.
“We have a once-in-a-generation opportunity to get this done, and I’m deeply committed and excited to get it done,” Rep. Colin Allred, D-Texas, said during a webcast hosted by Invest in America this week. week
How the bill can deal with inflation
Rep. Susie Lee, D-Nev., called the proposal “lifesaving legislation” for families and seniors during a separate webcast also hosted by Invest in America this week.
“It will ensure that drug companies will no longer be able to raise prices faster than the rate of inflation, so that families can keep up with these costs,” Lee said.
Prescription drug prices have sometimes risen two to three times the rate of inflation, said Glen Fewkes, director of health care access and affordability at AARP, during the Invest in America event.
If other prices rose at the same rate, gas would now cost $12.20 a gallon and milk would cost $13 a gallon, he said.
We believe this can tackle inflation and really put money back into the pockets of seniors.
Glen Fewkes
director of health care access and affordability at AARP
Fewkes said capping Medicare Part D prescription drug costs at $2,000 a year would make a big difference to the average Medicare beneficiary with an average income of $30,000 a year. Currently, Medicare beneficiaries pay 5% out-of-pocket after spending $7,050 during the year.
But for patients who have multiple medications or expensive prescriptions that cost five-figure sums, 5 percent can be a substantial burden, Fewkes said.
“We think this can really tackle inflation and really put money back in the pockets of seniors,” Fewkes said.
Changes included in the Senate bill
The federal government would have the ability to negotiate the prices of some high-cost drugs covered by Medicare Parts B and D. This number of traded medicines would gradually increase from 10 in 2026 to 15 in 2027, 15 in 2028 and 20 in 2029. .
The bill would also cap annual price increases for prescription drugs for people covered by Medicare and private insurance. Rebates would be imposed on drug makers that raise prices faster than inflation.
A $2,000 cap on Medicare Part D spending would be implemented, while the 5% coinsurance above the Medicare Part D catastrophic threshold would be eliminated.
It would also eliminate cost-sharing for Medicare Part D adult vaccines. Access to vaccines for Medicaid and the Children’s Health Insurance Program would also be improved.
The bill also extends subsidies for people who buy their own health insurance, which was set to expire this year, for three more years.
How many savings to expect?
In the midst of one of the worst public health crises in history, a record number of Americans are without health insurance.
John Fedele
The American Rescue Plan helped lower health care premiums for millions of Americans, Lee noted. If those subsidies expire, the average middle-class family of four will see a premium increase of about $6,600, he said. The average middle-class couple nearing retirement will pay nearly $16,000 more.
“Families just can’t afford that right now,” Lee said. “We have to approve these grants.”
It’s hard to know exactly how much Americans can save on prescription drugs, according to KFF, because specific drugs have not yet been chosen and price changes have not yet been determined.
“It’s pretty hard to say how many people will benefit and what their benefit would be,” Neuman said.
Notably, insulin was not listed in the Senate bill as a drug to be negotiated, while it was in the House version, Neuman noted. The House bill also sought to put a $35 monthly cap on insulin for people with Medicare or private insurance, he said.
The Senate has been separately discussing other measures to address insulin costs. It remains to be seen whether some or all of those proposals could be incorporated into the reconciliation bill, Neuman said.