Trump proposes reduction of drug costs under Medicare
A senior administration official outlined the plan Thursday on condition of anonymity ahead of the release of Trump's 2019 budget plan next week.
Pharmaceutical companies now pay rebates to insurers and pharmacy benefit managers to help their medications gain a bigger slice of the market.
Insurers apply savings from rebates to keep premiums more manageable.
Under Trump's proposal, seniors covered by Medicare's popular "Part D" prescription benefit would be able to share in the rebates for individual drugs that they purchase at the pharmacy.
Trump's budget would also expand Medicare's "catastrophic" drug benefit so that many seniors with very high costs would not face copayments. Seniors with high drug bills are currently still responsible for 5 percent of the cost of their medications. With some new drugs costing
The
Insurers and pharmacy benefit managers say the reason drug costs are so high is that drug companies are free to charge what the market will bear.
The pharmaceutical industry says middlemen are the problem, because they keep rebates paid by drug makers instead of passing them on to patients. Insurers counter that rebates are passed on in the form of lower monthly premiums for everybody.
The drug industry lobbying group,
The Trump administration's new proposals come on top of a long list of Medicare changes in the congressional budget deal. Medicare is the government's premier health insurance program, covering about 60 million seniors and disabled people.
Lawmakers would shift a greater share of Medicare drug costs to the pharmaceutical industry. They also want to eliminate the drug coverage gap known as the "doughnut hole" 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
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
— 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
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
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
— 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,
-_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
Hiking premiums on the well-to-do is an idea that has bipartisan support among lawmakers, but advocates worry that
-_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
—COST CONTROL BOARD REPEALED
The deal would repeal the
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