More than 350 healthcare, patient, veterans and business organizations on Tuesday urged Congressional leaders to reject any proposal to turn the Medicare Part D plan into one that resembles the rebates structure of Medicaid drug programs.
"Medicare Part D is an amazing example of a federal program that is actually working," said Jay Timmons, president and CEO, National Association of Manufacturers, on a conference call arranged by the Council for Affordable Health Coverage (CAHC) to announce the broad-based opposition to any change in Medicare Part D. "It is providing a valuable service that keeps costs down for taxpayers and Medicare beneficiaries. So policy makers need to hold on to the program as an example of how government can do a better job and not to be used as a bargaining chip."
Of concern, the groups noted, would be an expected shifting of costs for prescription drug medications to the seniors who now use the program, who are living on very low incomes. According to the CAHC letter, Part D premiums could increase by 20 to 40 percent if the program were shifted to a rebate approach.
Further, according to Joel White, CAHC's executive director, Medicare Part D is one federal program that has come in well under its estimated costs – by as much as $400 billion since the program was first launched in 2003 as part of the Medicare Modernization Act. It is also among the most well-liked programs currently run by the federal government, enjoying an approval rating among seniors in excess of 90 percent.
Under the rebate program, the savings that would accrue to the government wouldn't benefit current Medicare Part D beneficiaries as the program does currently.
"The rebate is puzzling to me, because it takes real savings in the terms of discounted prescription drugs and low premiums, and Part D enrollees won't see any of (that money)," said Robert Blancato, executive director of National Association of Nutrition and Aging Services Programs and a former Clinton administration official. "Just because a government has the ability to do something, doesn't always mean it is a good idea."
The panel assembled by CAHC for the press announcement also indicated that changing Medicare Part D to a rebate system could lead to many plans dropping from the program and also directly affect the health of seniors, leading to higher healthcare costs overall.
"Cutting payments for drugs for some of the sickest Medicare patients is short-sighted," said David Kendall, senior fellow for Health and Fiscal Policy, Third Way, a Washington-based think tank. "We know that these patients have many more chronic diseases and it turns out that drugs are one of the best ways to treat them. We have a burgeoning problem with chronic diseases and a health system that is ill equipped to (handle) that. But we do know, based on a CBO report released last week, that spending on drugs reduces healthcare costs elsewhere."
In addition to concerns such a policy change would have on the health of seniors and the affordability of prescription drugs, the CAHC also contends that moving to a mandatory rebate model for Medicare Part D would have a chilling effect on the pharmaceutical industry, one that could cost as many as 650,000 jobs as pharma companies would be forced to curtail employment and even reduce its R&D expenses.