The Senate drug bill is limited to Medicare. Here’s what it means for those with private insurance

However, in the end, they were forced to reduce what they offered – preventing the growth of drug prices from inflation and putting a $35 cap on insulin prices – to Medicare only to have their health and climate services approved through reconciliation, which only required a few votes.
The members of the parliament decided that the extension of the measures to the private market is not compatible with the reconciliation rules. So the Senate passed the bill without including private insurance Sunday, and the House is expected to take up the legislation later this week.

The private market in the US is large but fragmented among many insurers. More than 150 million Americans and their families have coverage through their employer, and more than 14.5 million people have Affordable Care Act policies.

Medicare also has many challenges, with more than 64 million seniors and people with disabilities enrolled, and they have been supporting the nation’s health care system.

Little touch on the local market

The bill’s narrow focus is not expected to hurt the private insurance market and could help curb drug price increases in the future, health experts said.

“I don’t think we have any reason to believe that the policies that will change Medicare will raise prices outside of Medicare,” said Dr. Benjamin Rome, a health researcher at Brigham and Women’s Hospital and Harvard Medical School.

In a review of the Senate Finance Committee’s 2019 bill that would have included the inflation rate for Medicare only, the DRM Budget Office said the provision would also reduce the cost of medical benefits offered by private insurance plans. The savings, however, were far less than what the CBO said the rules would have included in the common market, said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.

Lower inflation and Medicare’s ability to negotiate drug prices, one of the bill’s components, would make the prices Medicare pays more transparent, said Rena Conti, an economist at Boston University’s Questrom School of Business.

That would give pharmacy benefit managers, who negotiate with drug companies on behalf of insurance companies, Medicare drug plans, large employers and other payers, greater leverage in negotiations with their business clients, he said.

Also, the cost of Part B drugs, which are expensive prescription drugs, is based on the same sales. rates paid by commercial insurers. So the risk of inflation in Medicare can reduce the cost to manufacturers rise to the local market, Rome said.

However, the cost of Part D drugs purchased at a pharmacy is set using different base prices, so the cap can have a large impact on what insurers pay in the marketplace.

Including the private market in the law would have provided additional protections against bad behavior by drug manufacturers, giving them less room to raise prices outside of Medicare, Conti said. Also, it would ensure that insurers pass on the money they receive from drug manufacturers to their policyholders.

Concerns about price changes

However, some employer advocates are concerned that the legislation could mean higher medical costs for companies and their employees as the business market is no longer adjusted for inflation.

The law would disrupt the business of Medicare drug manufacturers and could cause them to shift costs to employers, said Alan Gilbert, vice president of policy at the Purchaser Business Group on Health, which represents 40 private companies and government agencies that purchase health care in excess. . 21 million Americans.

“It’s like a balloon,” Gilbert said. “When you squeeze one side and take the other out. That’s our real problem.”

Another group that could be adversely affected is children and the elderly who use expensive drugs that don’t have much competition, Conti said. Drug manufacturers may try to raise the prices of their drugs or set higher prices for drugs that target these people because they may not benefit from Medicare coverage. However, this applies to a small group of drug addicts and Americans, he said.

The Pharmaceutical Research and Manufacturers of America, known as PhRMA, said lawmakers are not taking care of patients.

“Unfortunately, nothing in this bill will help over-the-counter patients struggling to afford prescription drugs,” said PhRMA spokesman Brian Newell.

The cost of insulin

A $35 reduction in the cost of insulin for Medicare enrollees is unnecessary, experts said. Although the cost of insulin has risen significantly over the years, many people with private insurance do not pay more than that.
About one-fifth of those who take insulin and have coverage through multiple employers pay more than $35 a month for the drug, according to one study. analysis from the Kaiser Family Foundation. More than a quarter of people with Affordable Care Act plans and about a third of those with insurance through a small employer pay more than the limit.

Some private insurers and states are taking steps to help Americans buy the drug. UnitedHealthcare will waive out-of-pocket insulin costs for policyholders starting next year, with 20 states imposing co-pays. Also, the two drug manufacturers are producing cheaper versions of the drug, while other manufacturers are offering big discounts to some patients.

“The bottom line is that I don’t think stripping would have much impact on the general population,” Gerard Anderson, a professor of health and management at Johns Hopkins University, said of the insulin cap.