Medicare Part D is a lifeline to more than 43 million Americans age 65 and up. Since its creation more than 15 years ago, Part D has enabled seniors to choose between a variety of low-cost prescription drug plans.
But no program is perfect. Here are three ways Congress can improve Medicare Part D to lower seniors’ drug tabs.
1. Cap how much seniors pay for prescription medications
One million Part D beneficiaries had out-of-pocket costs above $5,000 in 2017. This isn’t okay — especially since more than half of Americans don’t have an extra $1,000 in savings to spot an emergency expense.
Thankfully, lawmakers have floated the idea of eliminating out-of-pocket costs for seniors who spend at least $5,100 on prescription drugs for the year. This type of reform would provide vulnerable seniors some much needed financial relief.
2. Pass rebates on to patients
Did you know that drug manufactures give out more than $150 billion in rebates each year? Probably not — that’s because those rebates don’t always translate into savings at the pharmacy counter.
Some of these rebates flow to middlemen in the drug supply chain. The rest trickle down to patients in the form of lower premiums. But that does little to help patients who require multiple medicines each month; they pay costly co-insurance fees for each pharmacy visit.
Congress should ensure these rebates flow to patients who need it. By one estimate, if all manufacturer rebates were passed to patients at the point of sale, seniors with diabetes could save $3.7 billion annually.
3. Protect Part D’s market structure
Part D has a unique structure that helps keep costs at bay. The government subsidizes coverage but private insurers administer plans. This model spurs competition among insurers, ultimately lowering costs for enrollees and improving access to quality drug coverage. Thanks in part to this competition, Part D came in $349 billion under budget in its first decade. Premiums are lower than expected, too — just half of original projections.
Today, eight in 10 enrollees report satisfaction with the cost and coverage of their Part D plan. Few government programs can tout that kind of success. But lawmakers can boost Part D’s popularity even higher with sensible, patient-centered reforms.
Peter J. Pitts is a former FDA Associate Commissioner and is president of the Center for Medicine in the Public Interest.