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Proposed Changes On Medicare Drugs Create Winners And Losers

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
Flickr Creative Commons
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

The Trump administration on Monday proposed changes to Medicare's prescription drug benefit that would affect patients' costs over the next few years, creatiing winners and losers.

Medicare's administrator, Seema Verma, said the goal is to lower costs for beneficiaries and modernize the government's flagship health insurance program for seniors and the disabled, covering about 60 million people.

The proposals apply to two popular parts of Medicare: private Medicare Advantage plans that offer comprehensive health care coverage, and prescription drug plans also offered by private insurers.

Changes would not take place until 2020 at the earliest.

"For beneficiaries there are trade-offs," said Tricia Neuman, a Medicare expert with the nonpartisan Kaiser Family Foundation. "Some could see cost-sharing for their drugs go down, but premiums are expected to rise."

Verma said the changes, if finalized, would ultimately save money for beneficiaries by sharpening competition among the insurers who deliver Medicare Advantage and prescription coverage. "At the end of the day, the patient remains in the driver's seat," she said. "They decide which plan to pick."

Among the changes:

— More leeway for insurers to exclude a specific drug in Medicare's six "protected classes" of medications. Those classes include antidepressants, drugs to treat psychosis, anti-seizure medications, cancer drugs, medications to prevent rejection of transplanted organs, and HIV-AIDS drugs. Proposed changes could run into strong opposition from patient advocacy groups, which derailed a similar effort by the Obama administration. The power to exclude a drug gives insurers more leverage to obtain lower prices from drugmakers.

— Updated e-prescribing requirements that would allow doctors and patients to get an accurate estimate of out-of-pocket costs when a prescription is written. "This capability has not been implemented at the doctor's fingertips because there has been insufficient demand for it," said Peter Bach of Memorial Sloan Kettering's Center for Health Policy and Outcomes. "This would create that demand, and would be a really good thing for patients."

— Giving Medicare Advantage insurers the ability to require "step therapy" for drugs administered in a doctor's office, which means patients first have to try a lower-cost medication. Doctor-administered drugs are a sensitive issue because many are cancer medications. Verma said safeguards in the proposed rule would protect patients, but it's another idea that will get close scrutiny from advocacy groups.

—Changing Medicare rules so a portion of rebates from drugmakers get passed on to patients when they pick up their medications at the pharmacy. This idea has been previously floated by the administration on a bigger scale, and Verma suggested it remains a work in progress. According to a cost analysis by the administration, the latest proposal would save money for some beneficiaries as well as for pharmaceutical companies but increase costs for taxpayers. Beneficiary premiums for drug coverage would be slightly higher.