Senate Dems Reach Draft Deal To Extend ACA Premiums, Lower Drug Costs

Democrats race to prevent spike in health premiums amid record inflation -  The Washington PostSource: Healthcare Dive, by Sydney Halleman

Dive Brief:

  • * Late Wednesday, Sen. Joe Manchin, D-W.Va., announced he reached a deal with Senate Democrats to pass a bill that would extend boosted premiums granted by the American Rescue Act into 2025.
  • * The bill, a slimmed-down version of President Joe Biden’s Build Back Better package, also allows Medicare to negotiate select prescription drug prices beginning in 2026 and caps Medicare Part D out-of-pocket costs in 2025.
  • * The premium extension and Medicare negotiations are part of a more than $300 billion package that includes funding for climate and energy programs and a tax hike for corporations.

Dive Insight:

Roughly 13 million people with healthcare plans under the Affordable Care Act have avoided an anticipated premium increase after enhanced premiums, which attracted a record 14.5 million marketplace enrollees, were set to expire at the end of this year.

Manchin, who previously blocked efforts to pass the bill, said late Wednesday that he had reached an agreement with Democratic Majority Leader Chuck Schumer, D-N.Y., to pass the now-rebranded Inflation Reduction Act of 2022.

“Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination,” Manchin said in a statement.

Also included in the Inflation Reduction Act — a bid to lower drug prices. Medicare will be allowed to negotiate the prices of some 10 pharmaceutical drugs in 2026, 15 more drugs in 2027 and 2028 and 20 more in 2029. In addition to price negotiation, the bill also imposes penalizing rebates on pharmaceutical manufacturers who hike drug costs above the rate of inflation starting next year.

In more cost reliefs, Medicare Part D out-of-pocket spending will be capped at $2,000 in 2025. The bill also aims to broaden Part D low-income subsidies eligibility in 2024 and do away with the 5% Part D catastrophic threshold coinsurance requirement. The Kaiser Family Foundation estimates that 1.3 million Part D enrollees without low-income subsidies exceeded the roughly $6,000 catastrophic coverage threshold in 2020.

To pass the bill, Democrats are now relying on a fast-track maneuver dubbed budget reconciliation that enables highly prioritized fiscal bills to advance with a simple majority instead of 60 filibuster-breaking votes.

FDA Mulls Drug Importation With States

Import Offices and Ports of Entry | FDASource: Axios, by Adriel Bettelheim

The FDA has started discussions with states over creating a way to import drugs from Canada — a policy the Biden and Trump administrations both embraced to bring down health costs but which experts regard as having limited impact.

The big picture: With President Biden’s drug pricing agenda stalled, importation could allow states to take advantage of lower drug prices abroad without the need for direct action to limit prices in the U.S.

  • Under one pathway, states, wholesalers and pharmacies submit importation proposals to HHS, which would be subject to safety and cost conditions.

Driving the news: The FDA last week held its first meeting with five states — Florida, Colorado, Vermont, Maine and New Mexico — that have submitted reimportation plans or are thinking about doing so, Politico first reported.

  • Biden’s executive order on promoting competition directed the FDA to work with states and Native American tribes on safely importing prescription drugs from Canada.
  • “The FDA is committed to working with states and Indian tribes that propose to develop … importation programs to reduce the cost of products to the American consumer while still protecting public health and safety,” an agency spokesman told Axios.

Yes, but: The Pharmaceutical Research and Manufacturers of America sued to block a 2020 federal rule that would facilitate importation, citing patient safety and other concerns.

  • Canada also said it has no plans to participate and has told drugmakers not to take steps that could lead to drug shortages there.

Cowen analyst Rick Weissenstein notes the Biden administration has been inconsistent on reimportation, supporting the idea in theory while arguing that it won’t work in legal briefs filed in response to the drug industry trade group’s legal challenge.

Our thought bubble: With Canadians officials adamant they won’t participate in the process, any importation plan is unlikely to actually bring down drug prices. The issue still could be politically appealing as the campaign season heats up.

Medical Marijuana Reduces Medicare Part D Drugs Costs


medical marijuana

Medical marijuana saves state and federal governments millions of dollars on Medicare. For example, prescriptions for painkillers have dipped drastically in states where medical marijuana is available, according to a Univ. of Georgia study published in the July issue of Health Affairs. Researchers combed through data on all prescriptions filled by Medicare Part D enrollees from 2010 to 2013 for a total of over 87 million physician-drug-year observations. In medical marijuana–approved states, the average doctor prescribed fewer doses of antidepressants as well as seizure and anti-nausea medication. Researchers narrowed the results to conditions for which marijuana may be an alternative treatment, selecting nine categories in which the Food and Drug Administration had already approved at least one medication: anxiety, depression, glaucoma, nausea, pain, psychosis, seizures, sleep disorders, and spasticity.

In 2013, Medicare saved $165.2 million in lower prescription drug use when 17 states and the District of Columbia implemented medical marijuana laws. The results suggest that if all states had implemented medical marijuana, Medicare would have saved about $468 million. “The results suggest people are really using marijuana as medicine and not just using it for recreational purposes,” said study author Ashley Bradford.

The next study will look at medical marijuana’s effects on Medicaid. Researchers expect the cost savings to be repeated, saying their findings suggests that more widespread state approval of medical marijuana could provide modest budgetary relief.

Drug Costs For Seniors Vary Widely Among Medicare Part D Plans

A HealthPocket report demonstrates a compelling reason to comparison shop for Medicare Part D plans. Costs vary widely among prescription drug plans across the United States. Choosing a well-known insurance brands is no guarantee of getting low drug costs, said Kev Coleman, head of Research & Data for HealthPocket. Consumers should consider premiums and cost sharing when evaluating their Medicare Part D options. They should also consider drug restrictions, which could greatly affect their satisfaction with a drug plan.

HealthPocket examined formularies for all 2014 Medicare Part D insurance plans sold in the United States. They estimated what a beneficiary would pay for premiums and prescriptions for each of the top 50 drugs sold in the U.S. and for each Medicare Part D plan. AARP’s MedicareRx Preferred plan in Arizona had the lowest costs while the Health Alliance Medicare Prescription PlanBasic in Illinois had the highest costs. In fact, it was 155% more expensive than the AARP plan. The Humana Enhanced plan had the lowest cost in 26 states and covered 48 of the top 50 drugs. The Aetna Medicare Rx Premier plan had the highest cost in 37 states and covered 41 of the top 50 drugs. Medicare requires Part D insurance policies to cover at least two drugs in most medication categories, but which drugs are covered within each category is left to the discretion of the insurance company. Moreover the same drug covered by two different Medicare Part D plans can charge different amounts, and these differences can significantly affect the economic value of the Part D plan for beneficiaries. For more information, visit

Last Updated 08/10/2022

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