MedPAC wants to push insurers to curtail Part D drug costs

If a federal advisory panel gets its way, health insurers will soon have greater incentives to manage beneficiaries' prescription drug use and negotiate discounts with pharmaceutical manufacturers, the New York Times reports.

While the federal government currently reimburses insurers 80 percent of Medicare beneficiaries' drug costs that exceed a "catastrophic" level, the Medicare Payment Advisory Commission (MedPAC) will recommend in its June report to Congress that it cut that share of reimbursement to 20 percent. It also will recommend that Congress eliminate Medicare beneficiaries' 5 percent share of drug costs above the catastrophic threshold, the article says.

One commission member, Georgetown University professor John F. Hoadley, tells the Times that the latter change would be a "huge benefit' for Medicare beneficiaries, who increasingly grapple with high drug costs. 

MedPAC wants to grant insurers more discretion with how they cover drugs such as antidepressants and immunosuppressants, part of a protected class of drugs for which Medicare currently has strict coverage requirements. It also seeks to create financial incentives for greater use of generics by low-income people, who account for a large share of Part D spending.

But the recommendations don't sit well with some trade groups and patient advocates. Representatives from the Pharmaceutical Research and Manufacturers of America as well as the National Alliance on Mental Illness tell the Times that the policies could put some of Medicare's most vulnerable beneficiaries in jeopardy.

And America's Health Insurance Plans spokeswoman Clare Krusing says Medicare payment cuts could lead to higher premiums for beneficiaries. AHIP has been a stalwart advocate against cuts to the Medicare Advantage program, which is increasingly popular with beneficiaries and is a booming business for private insurers.

To learn more:
- read the Times article

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