Prescription drugs among budget deal changes to Medicare

WASHINGTON (AP) — Drug companies would bear a bigger share of Medicare's costs under the congressional budget deal, a shift that could help limit future increases in beneficiaries' premiums for prescription coverage.

Changes to Medicare's popular "Part D" prescription plan headline a long list of budget-deal tweaks to the government's premier health insurance program, which covers about 60 million seniors and disabled people. Also, the drug coverage gap known as the "doughnut hole" would be eliminated one year earlier than currently scheduled, in 2019 instead of 2020.

"On the whole, I think this is a good bill for people with Medicare," said Joe Baker, president of the Medicare Rights Center, an advocacy group for beneficiaries. "This tilts toward getting a lot of good things done."

But his group opposes a provision that would raise premiums paid by the wealthiest retirees for coverage of outpatient services and prescription drugs.

Here's a look at some of the major Medicare provisions in the budget deal that Republican leaders are trying to push through Congress. Democrats are split over the overall measure, but the Medicare provisions appear to have support from both parties:

— PRESCRIPTION DRUGS

Originally, beneficiaries in the "doughnut hole" coverage gap were responsible for the full cost of their medications, but the Affordable Care Act passed under former President Barack Obama gradually closes the gap. The budget deal accelerates the timetable by one year, to 2019.

Drug makers are already required to provide discounts to close the coverage gap, but the budget deal raises the level of company discounts, which in turn lowers the government's costs. That should act as a brake on the monthly premiums paid by beneficiaries.

"In theory when Medicare spending goes down, premiums would go down, too," said Tricia Neuman, a Medicare expert with the nonpartisan Kaiser Family Foundation.

The drug industry is criticizing the proposal, saying it will mainly benefit insurance companies that act as middlemen providing the benefit.

The coverage gap starts when beneficiaries hit $3,750 in total drug costs and ends after total costs reach around $8,500.

— CAPS REPEALED ON REHAB

The budget deal permanently repeals limits on therapy services commonly used by stroke patients and people recovering from major surgeries. Those services include physical therapy, occupational therapy and speech therapy.

In previous years, Congress had routinely held off on applying the caps. Groups including AARP were pressing for a full repeal. It takes effect this year.

-_HIGHER PREMIUMS FOR WEALTHIEST RETIREES

Premiums for outpatient coverage and prescription drugs would rise for about 1 million wealthy seniors with annual incomes of at least $500,000 for an individual, or $750,000 for a couple filing jointly.

Hiking premiums on the well-to-do is an idea that has bipartisan support among lawmakers, but advocates worry that Congress will ultimately start raising costs for middle-class seniors as well.

-_TELEMEDICINE AND CHRONIC CARE

The budget deal expands Medicare's ability to pay for telemedicine in a wide variety of situations, including for patients with stroke symptoms.

It also incorporates a bipartisan Senate bill that is intended to improve care coordination for patients with chronic illnesses, such as heart disease, cancer, and diabetes.

—COST CONTROL BOARD REPEALED

The deal would repeal the Independent Payment Advisory Board, a Medicare cost-control agency authorized under the Affordable Care Act. It was controversial from the beginning, and the Obama White House did not move forward to set up the board.