Legislative Update: November 2019

Legislative Update: November 2019

Drug Legislation Running Out of Time as Part D Costs Set to Soar

By Shannon Benton, Executive Director

Medicare Part D’s True Out-of-Pocket-Cost (TrOOP) spending requirements which are unusually high as it is, are poised to make a stunning and unprecedented jump in 2020.  Unless Congress takes action, the Part D doughnut hole coverage gap will swell by 25% next year, from $5,100 in 2019, to $6,350 in 2020 ($1,250 increase) before the catastrophic phase of coverage kicks in. This would be the largest increase in Part D’s required out–of–pocket spending ever, since the start of the program in 2006.

In counting out-of-pocket spending, Medicare does not include the cost of monthly Part D premiums or the cost of any drugs that aren’t listed on your drug plan’s formulary.  And, even after hitting $6,350, out-of-pocket spending would not end there, because Part D has no annual out-of-pocket maximum.  The TrOOP cost is the amount you must spend before you qualify for the catastrophic stage of Part D coverage, when Medicare steps in and co-insurance goes down.  But you still are required to pay a minimum of $3.60 for generic drugs or a 5% coinsurance for brand drugs.

Now, as we draw close to the end of the year, the window for Congress to take major action to lower prescription drug prices is beginning to close.  Concern is growing that the prospects of a substantial drug price reduction bill may get lost in the politics surrounding the 2020 election.  Legislation that would allow Medicare to negotiate the cost of prescription drugs is in the House, and a bipartisan bill that would cap out-of-pocket Part D costs at $3,100 a year is stalled in the Senate.  The whole effort is fiercely being fought by the pharmaceutical industry, and the outcome remains unclear.

Nearly 20% of participants in TSCL’s Senior Survey say they spent $3,100 or more out-of-pocket on prescription drugs in 2018.  And, as we age, all of us face the grim potential that a new health problem could increase our spending on prescription drugs to this level.  Doing nothing to lower drug prices for Medicare beneficiaries is not a good option.

President Trump has said that he wants to deliver on his promise to lower drug costs, but bipartisan legislation is required to cap costs and provide real cost savings for older Americans.  If Congress fails to take action, older Americans will bear the increasing burden of higher drug spending through depleted savings, higher taxes, and a lower standard of living.

Your contact with Members of Congress is important now and could help clear the legislative path for this important legislation.  Call your Member of Congress now toll free at 1-844-455-0045.  Calls to your elected lawmakers made on this number will be paid for by The Senior Citizens League.


Sources:  “What’s the Latest on Medicare Drug Price Negotiations?,” Kaiser Family Foundation, July 2019.