Some significant changes to Medicare could be on their way.
With the House passage of the $1.7 trillion Build Back Better Act on Friday, provisions that would improve Medicare have moved a step closer to becoming law. The Senate must still pass its version and the possibility exists that any final measure agreed upon by both chambers may look different from what’s in play now.
If the Medicare provisions remain intact, the federal government would be permitted for the first time to negotiate the price of certain drugs with pharmaceutical companies. That move is intended to bring down the cost of some prescription drugs.
Additionally, beneficiaries’ out-of-pocket spending for Medicare’s drug benefit (Part D) would be capped at $2,000 annually beginning in 2024 (with yearly adjustments) and the cost for insulin would be limited to $35 per month.
Hearing services also would be covered under Part B (outpatient care coverage) starting in 2023. This would include hearing rehabilitation and treatment services, as well as hearing aids. (Earlier versions of the spending bill included dental and vision coverage but they were scrapped.)
“The proposal that would probably have the most direct effect on beneficiaries is the cap on [Part D] out-of-pocket spending, particularly for people who take expensive drugs,” said Tricia Neuman, executive director of the Medicare policy program at the Kaiser Family Foundation.
For some of Medicare’s 63.3 million beneficiaries — the majority of whom are age 65 or older — limiting out-of-pocket drug spending could mean saving thousands of dollars per year because there currently is no cap. Roughly 1.2 million enrollees spent more than $2,000 on drugs delivered through Part D in 2019, according to research from the Kaiser Family Foundation.
“In any given year, it’s a relatively small number of people who have high drug expenditures, but those who do tend to have serious medical conditions that require very pricey drugs,” Neuman said.
Meanwhile, price negotiations with pharmaceutical companies would start in 2025 with up to 10 drugs that year, she said. That number would reach 20 by 2028.