ON MEDICARE, DEMOCRATS SHOULD NOT TRUST TRUMP
President Trump doesn’t understand or care about healthcare policy. He recently suggested that health insurance costs just $12 a year. And he fervently supported the GOP’s Obamacare repeal plan, which would have increased deductibles from $800 to $13,000 for individuals making $26,500 a year. That’s hardly the “great health care” plan with “much lower deductibles” that the president repeatedly promised.
The president’s advisors are more knowledgeable — but no less callous. As a member of Congress, Health and Human Services Secretary Tom Price sponsored multiple bills that would have stripped healthcare from tens of millions of working-class Americans, including those with preexisting conditions.
So it’s mind-boggling that many Democrats want to give President Trump and Secretary Price the power to drastically alter Medicare’s prescription drug benefit. Enabling them to pick and choose which prescriptions Medicare covers would endanger the health of 24 million seniors and people with disabilities.
Currently, Medicare’s drug benefit, Part D, provides seniors and the disabled with access to subsidized, affordable prescription drug plans. Implemented in 2006, Medicare Part D has been an overwhelming success.
Part D plans provide beneficiaries access to most of the latest, most effective medicines. Of the top 200 most prescribed Medicare Part D drugs, the average Part D plan covers 191 of them.
Part D also comes in well under budget. In its first decade, it cost $349 billion — 45 percent — less than original Congressional Budget Office projections.
Medicare Part D works so well because of the “non-interference” provision, which restricts federal officials from dictating what drugs Part D plans should cover.
Rather, the federal government outsources plan design to insurance companies. These companies bargain with drug manufacturers to secure steep discounts on medicines. With these discounts, insurers can afford to offer plans that have low premiums, co-pays, and deductibles.
Insurers compete with one another to attract enrollees. So they offer a variety of plans to appeal to beneficiaries with different needs and budgets. Seniors can choose the plans with the right mix of drug coverage, premiums, and deductibles for them.
Seniors like these plans. Nine out of 10 Part D enrollees report satisfaction with their coverage.
Some Democrats think the plans would be even cheaper if the federal government negotiated drug discounts directly with pharmaceutical companies. So they want to repeal the non-interference provision and give Secretary Price the authority to conduct these negotiations.
The Congressional Budget Office, the same non-partisan research group that Democrats are rightly defending from White House attacks, warns that negotiations wouldn’t reduce prices any further. Insurers, who have every incentive to bargain hard, already extract the maximum discounts possible from drug companies.
The CBO explains that the only way the government could secure lower drug prices is by establishing a one-size-fits-all “formulary,” or list of covered medicines, and excluding certain drugs. In other words, the Trump administration would determine which prescription drugs Medicare beneficiaries can access.
Which drugs would this callous administration drop from coverage? Likely the newest, most advanced medicines.
Indeed, federal officials currently have the power to determine the medicines included on the Department of Veterans Affairs formulary. They’ve opted not to include 37 of the top 200 most frequently prescribed Part D medicines.
Part D provides tens of millions of seniors with high-quality prescription drug insurance. Democrats would be foolish to turn the program over to the same administration that thinks working-class Americans can afford $13,000 deductibles.
Ron Klink is a former Democratic congressman from Pennsylvania and is currently senior policy adviser at Nelson Mullins Riley & Scarborough LLP.