Judy: The U.S. Senate is set to
vote on president Biden's
proposed budget package next
week after Democrats struck a
deal on health care and climate
provisions.
Some key proposals in the bill
aim to lower the cost of
prescription medication for
seniors.
Laura barron-lopez has our look.
Laura: For the first time, the
federal government could have
the power to negotiate prices
for some of the costliest drugs
covered under medicare.
The proposed legislation would
also help medicare recipients by
capping out of pocket drug costs
at $2000 a year, imposing
financial penalties on drug
manufacturers who raise prices
faster than inflation, and
removing the 5 percent co-pay
beneficiaries must pay when they
max out on coverage for
high-cost drugs.
Drug companies have fought these
types of drug pricing reforms
for years.
If the bill passes, it could
provide relief to millions of
Americans.
For more on all this, I'm joined
by Julie Rovner of Kaiser health
news.
Thank you for being here.
Julie: Thank you for having me.
Laura: Democrats have been
trying to allow medicare to
negotiate drug crisis for some
20 years.
What impact will this have?
Julie: It is a big deal.
As you say, Democrats have been
trying to allow medicare to
negotiate drug prices since the
1980's.
They have been fighting about
this ever since.
It would start with just a few
drugs really just 10 the first
, year and it would not expand
very much, but some of the most
expensive drugs are an enormous
part of what medicare spends on
drugs so it could have an
outsized impact.
Laura: This is for 20 of the
costliest drugs, correct?
But does this apply to any new
drugs and one company start?
Julie: It does not apply to new
drugs, at least initially, they
have to have been on the market
for quite some time without
generic competition.
So these are for drugs that are
very expensive, but don't have
anything that helps bring those
prices down.
The government would step in to
do that and eventually it would
be 20 drugs.
At the beginning it would only
be 10 drugs.
It's a very small number that
the negotiation applies to.
Laura: As you know, inflation is
high.
People are really worried about
all of their expenses.
So what kind of savings will
people see from the cap on
copays?
Julie: People could see
significant savings.
People right now, there is, as
you mentioned, there's a
catastrophic portion of the
medicare drug benefit where if
you go over that, you only have
to pay 5%, but that 5% can be a
lot of money with some of these
really expensive drugs.
So the combination of not having
to pay that 5% and not having to
pay more than $2,000 a year on
co-pays could save millions of
medicare beneficiaries a lot of
money.
Laura: Democrats are also
contemplating within this deal
continued cost savings for
people who have insurance under
the affordable care act.
What does it do in this bill?
Julie: Basically, it continues a
policy that congress put in
place in 2021 that made larger
subsidies for people buying
coverage under the affordable
care act, who were already
eligible and made some people
who have not been eligible --
those who earn about $50,000, a
year or more had been ineligible
for any subsidy.
So it made those people
eligible.
Those will expire at the end of
2022 if congress doesn't extend
them.
This would extend them three
It would be really important
because if congress doesn't
extend them, these people will
start getting notices of premium
increases and in some cases
could be premium doublings right
around the time they vote in
early November.
Laura: Right, they would have
gotten those right before
November.
And that gets me to the politics
of this.
All the provisions that we just
talked about that could
potentially be passed.
Can you tell us a little bit
about the potential political
benefit for Democrats if they if
they succeed?
Julie: Well, this is something
that Democrats have been
promising for the last several
presidential elections and
something they haven't been able
to do, partly because of the
power of the prescription drug
industry, and they're already
fighting this tooth and nail.
As much as people are saying
this is such a small piece of
what started out as president
Biden's big bill back better
bill it's still really
, significant when it comes to
prescription drug spending.
Laura: Also, Democrats are
considering a measure to lower
the cost of insulin that could
be a potential add in to this
larger reconciliation bill.
What do we know so far about
that?
Julie: We know that there's been
a lot of people who are
supporting this, they have said
they want to add it.
This has been a bipartisan
effort to cap the price of
insulin for people with
diabetes.
Basically, at $35 a month.
Right now there's people who die
because they can't afford their
insulin.
It's not clear exactly which
provisions will make it in, but
there's certainly an effort to
do something in specific about
insulin.
Laura: And as we mentioned
earlier, inflation is high
Americans are struggling to pay
, for groceries and other
consumer goods.
So when you look at this slew of
health care benefits that could
potentially pass, how much
difference do you think it could
make for people's bottom line?
Julie: Well, obviously for the
affordable care act, it could
make a difference for them not
getting a huge increase, which
is not something that that's
really that small, even though
it won't change anything.
If they don't do it, it would go
up very much.
But drug prices have been a
continuing problem.
Rising drug prices for
Americans.
They've told pollsters for years
doing something about drug
prices is very popular even
before we had this sort of spate
of high inflation.
Drug price inflation has been a
problem going back many, many
years.
As I said, something both
parties would like to do.
President trump tried to do
something and didn't get very
much done.
So this would be a big win for
the Democrats.
Laura: Thank you so much, Julie
Rovner of Kaiser health news for
joining us today.