HHS's ideas for rearranging Medicare would raise costs for seniors

  • The Hill | by: Peter J. Pitts |
  • 06/18/2019 12:00 AM
Eight in 10 Americans believe prescription drug costs are too high, according to a Kaiser Family Foundation poll. Given this widespread frustration, it's easy to see why the Trump administration has made reducing the cost of medicines a top priority.

HHS officials claim to have a solution — changing which parts of the Medicare program pay for certain drugs. It’s a change for the worse.

Medicare Part B currently covers all medications taken under a doctor's supervision, such as infusible treatments for multiple sclerosis or advanced cancer drugs administered via IV drip.

Under the envisioned reform, some of these medicines would instead be covered through Part D, the portion of Medicare that helps people afford prescriptions at the pharmacy.

HHS's reasoning is simple. Part D pays less for drugs, on average, than Part B. So, the more drugs covered under Part D, the less the government will spend. According to a recent study in JAMA Internal Medicine, this reform could reduce Medicare drug spending by up to 18 percent.

But there's a catch: This change would only affect what the government pays. Patients wouldn’t save a dime. In fact, patients could see their out-of-pocket costs skyrocket — a particularly nasty unintended consequence.

This new arrangement would particularly hurt 25 percent of traditional Medicare enrollees who purchase supplemental "Medigap" policies that cover out-of-pocket costs for Part B treatments. Many people with Medigap policies currently pay little or nothing out-of-pocket.

 
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