Home Career Senate Reconciliation Has “Once in a Generation” Reform.

Senate Reconciliation Has “Once in a Generation” Reform.

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While individuals and families struggle with rising prices, there is one category that is rising faster than inflation: prescription drugs.

Now, a new Senate reconciliation bill introduced by Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Joe Manchin, DW.Va., aims to help Americans deal with rising health care costs.

The Senate proposal includes significant reforms, such as allowing Medicare to negotiate prescription drug prices and setting limits on those price increases, according to Tricia Neumann, senior vice president and executive director of the Medicare Policy Program at KFF, a nonprofit an organization that deals with issues of health protection of the country.

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It also includes a $2,000 limit on out-of-pocket costs, which would provide relief to Medicare beneficiaries who take expensive prescription drugs.

“This is really the first time since 2010 that Congress has moved forward with any legislation to significantly improve drug coverage for people on Medicare,” Neumann said.

Notably, the legislation also limits drug price increases for people with private insurance.

The proposal is expected to be considered by the Senate next week, when the parliamentarian will give the go-ahead that the provisions of the package can be passed by a Democratic majority.

According to Neumann, the proposal is very similar to the bill passed by the House of Representatives, which will consider the Senate version after it passes. Some House Democrats have already expressed strong support for the bill this week.

“We have a once-in-a-generation opportunity to see this through, and I’m very committed and excited to do it,” Rep. Colin Allred, D-Texas, said during a webcast hosted by Invest in America this week.

How the bill can fight inflation

Rep. Susie Lee, D-Nevad, called the proposal “lifesaving legislation” for families and seniors during a separate webcast also hosted by Invest in America this week.

“This ensures that pharmaceutical companies can no longer raise prices faster than the rate of inflation so that families can keep up with these costs,” Lee said.

Prescription drug prices have sometimes increased by two to three times the rate of inflation, said Glenn Fewks, AARP’s director of health care access and affordability, during an Invest in America event.

If other prices were to rise at the same rate, gas would now cost $12.20 a gallon and milk $13 a gallon, he said.

We think it can really handle inflation and really put money back into the pockets of seniors.

Glenn Fewks

director of health care accessibility and affordability at AARP

Limiting out-of-pocket Medicare Part D prescription drug costs to $2,000 a year would make a big difference for the average Medicare beneficiary with an average income of $30,000 a year, Fewks said. Currently, Medicare beneficiaries pay 5% out-of-pocket after they spend $7,050 in a year.

But for patients who take multiple medications or expensive prescriptions that cost five figures, 5% can be a significant burden, Fewks said.

“We think it can really handle inflation and really put money back in the pockets of seniors,” Fewks said.

The changes are included in the Senate bill

The federal government will be allowed to negotiate prices for some expensive drugs covered by Medicare Parts B and D. The number of contract medicines will gradually increase from 10 in 2026 to 15 in 2027, 15 in 2028 and 20 in 2029. .

The bill would also cap annual increases in prescription drug prices for people covered by Medicare and private insurance. Discounts will be introduced for drug manufacturers who raise prices faster than inflation.

A $2,000 out-of-pocket limit on Medicare Part D spending would be introduced, and the 5% coinsurance above the Medicare Part D catastrophic threshold would be eliminated.

It would also eliminate cost-sharing for vaccines for adults under Medicare Part D. Access to vaccines would also be improved for Medicaid and the Children’s Health Insurance Program.

The bill also extends subsidies for people who buy their own health insurance, which was set to expire this year, for another three years.

How much to expect savings

Amid one of the worst health care crises in history, a record number of Americans are without health insurance.

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The “American Rescue Plan” has helped millions of Americans lower their health care premiums, Lee said. When those subsidies end, the average middle-class family of four will see a premium increase of about $6,600, she said. The average middle-class couple will have to pay nearly $16,000 more before retirement.

“Families just can’t afford it,” Lee said. “We have to accept these subsidies.”

It’s hard to know exactly how much Americans could save on prescription drugs, according to KFF, because specific drugs have not yet been selected and price changes have yet to be determined.

“It’s pretty hard to say how many people will benefit from it and what the benefits will be,” Neumann said.

Notably, insulin was not included in the Senate bill as a debatable drug, while it was included in the House version, Neumann noted. The House bill also sought to impose a $35-a-month cap on insulin for people with Medicare or private insurance, she said.

The Senate separately discussed other measures to address insulin costs. It remains to be seen whether some or all of those proposals can be included in the reconciliation bill, Neumann said.

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