3.5 million beneficiaries would likely save more than $1,500 a year.
Starting sooner, in 2024, people whose out-of-pocket drug costs reach the "catastrophic" threshold of $7,050 won't have to pay any additional money on drugs that year. Currently, there is no cap, and people must pay 5% of the cost of extremely expensive drugs after hitting the threshold.
Also starting in 2024, Medicare would extend low-income sub
sidies to about 500,000 beneficiaries who earn between 135% and 150% of the poverty level ($18,347 to $20,385 for a single person). Premium hikes on drug plans would also be limited in 2024 to 6% for all beneficiaries through 2029.
"The bill would give the federal government the ability to negotiate prices of some drugs purchased by Medicare beneficiaries, and it would extend the enhanced premium subsidies for people who buy insurance on the Affordable Care Act marketplaces that Congress put in place last year to help confront the covid-19 pandemic."
The bill could have reached far more people, but Democrats' attempts to slow the increase in drug prices and cap insulin copays outside of Medicare were blocked.
Because the bill is being passed on expedited procedures known as budget reconciliation, all the provisions must have a direct impact on federal spending or revenue. The Senate parliamentarian, who vets such measures, ruled that the insulin and inflation
measures targeting the private insurance market were out of bounds. Democrats tried to add back the broader-market insulin cost caps but fell three votes shy of the 60 needed to do so, with only seven Republicans joining them.
Senate Majority Leader Chuck Schumer pledged to hold another vote on expanding the insulin cost cap in the fall.
Still, some analysts see reasons to believe that most Americans not directly affected by the bill will see some benefits, particularly from the limits on drug price increases and the Medicare drug price negotiations.
In a conference call with reporters Thursday, Sean Dickson of the nonprofit West Health Policy Center (westhealth.org) pointed to the government's 340B program, in which drug companies are required to provide discounts to certain care providers and in which there are inflation penalties. He estimated that Medicare alone (340binformed.org/2020/12/340b-in-2020-a-year-of-hope-amid-heartbreak) saved $7 billion over five years indirectly because of those inflation restraints.
"There was a spillover effect from the subsection of a government program that had an inflation penalty," Dickson said. "That resulted in lower costs for everyone who used those drugs and slower price growth." •
ABOUT THE AUTHOR:
Michael McAuliff covers Congress, the White House and national politics, currently as an independent reporter for the New York Daily News and other outlets including Kaiser Health News, The Daily Beast, Tarbell, and Now This.
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