Administration Faces Opposition To
Changes In Medicare Prescription Drug Program
Officials say they want to help
beneficiaries make good choices and save taxpayers money
Mary Agnes Carey, KHN Staff Writer
March 7, 2014 - Medicare’s
prescription drug program was controversial when it arrived, but a
decade later it is widely considered to be a Washington success story.
Now, though, the Obama administration isproposing a series of
significantchanges to fix what critics say isn’t broken.
Administration officials say they
want to help beneficiaries make good choices and save taxpayers money.
But some patient groups, pharmaceutical manufacturers and lawmakers in
both parties are pushing back against various elements.
regulation would affect several
aspects of the Medicare drug program, also known as Part D, ranging from
new limits on the number of plans insurers could offer consumers to new
rules about what drugs those plans must cover. It also would prohibit
exclusion of pharmacies from a plan’s “preferred pharmacy network” as
long as they agree to the plan’s terms and conditions.
administration’s proposal would “touch everything from formularies to
bidding, to the interaction between plans and pharmacies, to audit
requirements, to which providers are going to be eligible to prescribe
Part D drugs,” said Lisa Joldersma, vice president of public programs
policy at Pharmaceutical Research and Manufacturers of America, an
industry trade and lobbying group. She worked at the federal Centers
for Medicare & Medicaid Services (CMS) in legislative affairs when the
drug benefit was created and in a second stint where she focused on the
health law. “There is something [in the rule] that touches every single
stakeholder in the Part D world.”
Critics of the
regulation say it’s an example of classic government overreach –
meddling with a successful program that seniors like and costs the
government billions less than predicted. “Only in Washington would
there be a big government solution in search of a problem that does not
exist,” said Rep. Michael Burgess, R-Texas. But Jonathan Blum, principal
deputy administrator for CMS, said while it’s important to celebrate
Part D’s success, its vulnerabilities must also be addressed.
Blum says the
Part D changes are part of the agency’s ongoing effort to strengthen the
program, which was created in 2003, while giving its 38.5 million
beneficiaries better choices. The proposal was released in January and
next Friday is the deadline for public comments. CMS has given no
timeframe for when final regulations would be issued.
CMS’ plan to alter Part D has hit
heavyopposition. In a
letter to CMS, more than 200
groups representing patients, seniors, health insurers, drug makers and
business urged the agency to withdraw the proposed rule. The groups say
it would “dramatically expand the federal government’s role in Medicare
Part D despite the fact that there is no compelling reason for doing
so.” If it becomes law, “millions of seniors and beneficiaries with
disabilities would lose their current plan of choice or face changes in
coverage,” they wrote.
Opposition is growing on Capitol
Hill as well. A bipartisan majority of the Senate Finance Committee
wrote to CMS Administrator
Marilyn Tavenner on Friday to object to the proposed rule. Given Part
D's "remarkable success, we are perplexed as to why [CMS] would propose
to fundamentally restructure Part D by requiring immediate, large-scale
changes to the program that have direct consequences for beneficiaries.
Many of the proposed changes are untested and unstudied and could result
in significant loss of beneficiary choice, access and consumer
But some of the proposal’s elements
have won praise from seniors’ advocates. A plan to limit the number of
Part D plans a company can offer in any one region – a proposal
criticized by some Republican members of Congress for restricting
seniors’ choices for coverage – may actually help ease confusion among
seniors, said Joe Baker, president of the Medicare Rights Center.
“We observe that older adults and
people with disabilities find choosing among a large number of Part D
plans a dizzying experience,” he said. “Most people with Medicare fail
to reevaluate their coverage options on an annual basis, largely because
there are too many options and too many variables to compare.”
According to the Congressional
Budget Office, the Medicare Part D program cost the federal government45 percent less than forecast from 2004 through 2013. But CMS
expects costs to climb. Government subsidies for insurers in high-risk
markets and low-income cost sharing subsidies continue to increase, Blum
told the House Energy and Commerce subcommittee on health last
Wednesday.New, expensive biologic therapies will also likely add
to the total bill.
Blum noted several elements of the
proposal that would reduce costs. Lifting some restrictions on drugs
that must be covered will give Part D plans more power to negotiate
discounts, which will save taxpayers money, CMS asserts. In addition,
the agency says, changing the rules about how Part D “preferred pharmacy
networks” operate will produce savings for the government. The proposed
regulation would also give the agency new ways to fight waste and fraud.
The agency estimates the proposed changes would save $1.3 billion
between 2015 and 2019.
“We also have to recognize that in
some circumstances, due to current regulations, market-driven
competition among Part D sponsors is not bringing down costs as
efficiently as it could,” he said.
The battle over the proposed
changes to the Medicare drug program comes as some congressional
Democrats are nervous about the party’s vulnerability on health care
Republicans have made repeal of
President Barack Obama’s health care law central to their campaign to
take control of the Senate and keep the House in the fall elections. The
idea of eliminating some Part D plans because they are duplicative of
current offerings – CMS’s rationale for the proposed change -- has
helped Republicans revive criticism ofthe president’s “if
you like your plan you can keep it” pledge on the health law.
This KHN story was produced in collaboration
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