Turbulent Times Ahead

As the summer draws to a close, the citizens of this great nation face a dangerous time, the return of the politicians to Washington after the August recess. All of those who represent us think that they must take action, fix something, change things. It never crosses their mind that leaving things that are working alone might be a valid approach. Medicare, especially Part D, the prescription drug benefit, is something that has been working better than expected. Over the years, it has enjoyed a continued vote of confidence from seniors (we’ll talk about the latest Part D satisfaction poll next month). Washington needs to consider the old adage, “if it aint broke, don’t fix it.” Nevertheless, there is a strong possibility that Congress and/or the President will be predisposed to making changes in Medicare and Part D.

There are two bills that will be at the top of the priority list when Congress returns, the bipartisan infrastructure bill and the 3.5 trillion dollar social policy bill that the Democrats can pass with a simple majority using budget rules. The infrastructure bill, as drafted, does not include substantive changes to Medicare. The bipartisan nature of the bill kept it focused on infrastructure issues. The other bill, often called the reconciliation bill, will most likely contain many proposed changes to Part D. The President has already given the Department of Health and Human Services and Congress some strong guidance on what he wants in the reconciliation bill. He said that he wanted three changes: the first two would allow the Government to set prices on prescription drugs – the so-called negotiation option and the ability to charge penalties if drug prices are raised higher than inflation. The third change would set a cap on the yearly out-of-pocket prescription drug charges for Medicare beneficiaries.

When anyone proposes changes to Part D I always look at how it affects the beneficiaries. . . how does it affect what I pay and my access to medications? There is no guarantee that having the government controlling drug prices will result in any savings for you and me. Drug manufacturers may make less and Medicare may pay less but the convoluted pricing and supply structure may limit any savings from getting down to the patient. The third proposed change, the out-of-pocket cap, is the only change that will benefit the patient. I’ve discussed how important this change would be for those who are saddled with unrestrained out-of-pocket costs. It would correct the problem of requiring the sickest amongst us to bear the burden of huge costs.

I expect there will be a huge amount of pressure to include changes to Medicare in the social policy bill. As you might expect, I have some thoughts that I hope Congress and the President would consider.

First, President Biden has already threatened to use Executive Orders (EO) to accomplish some of the proposed changes. It was wrong when President Trump did it and it’s wrong if President Biden does it. Presidential fiat is not the way we deserve to be governed. There are constitutional checks and balances that are the basis of how changes are made. Circumnavigating these checks and balances is not the way to make changes. These EOs are almost always subject to legal challenges. They are also subject to being rescinded by the next President, as President Biden has already done to some of President Trump’s EOs.

Second, it just doesn’t seem right to use money supposedly “saved” from Medicare costs to fund other initiatives. Medicare is not an ATM to be used to fund other parts of the government.

Third, the pandemic has caused a great deal of chaos in the supply chain for prescription drugs, coupled with President Trump’s Executive Orders and then President Biden’s withdrawal of some of those Orders, the drug manufacturers have found it difficult to keep the research and development and the manufacturing processes efficient. Throwing more change into this system is a prescription for shortages.

Fourth, is now the time we want to insert the government deeper into our healthcare? American’s trust in our government’s ability to advise us on healthcare is at an all-time low. It seems that there is more and more distrust in the accuracy and motivation of the guidance coming from Federal institutions. Somehow, our leaders need to work to regain this trust. Changing a part of our healthcare that produced a life saving vaccine in record time is not the way to accomplish this difficult task.

Fifth, the drug manufacturers and the insurance companies have already indicated their willingness to sit down and talk about improvements that can be made. There are bad players and bad rules and regulations that need to be dealt with. This seems to be a logical way forward.

As you can see there is a lot to consider in the months ahead. We’re at a critical crossroads. I ask that you pay attention as those in Washington consider these important changes to our healthcare. Don’t hesitate to tell them how you feel about these changes. The one thing that everyone in Washington cares about is your vote. Know where your Senators and Representative stand on these changes and don’t hesitate to tell them how you feel.

Best, Thair