One of the underlying issues of rising costs lies in the hands-off role that the government is given in regards to the price-setting of drugs offered through prescription drug plans (PDPs). The Medicare Prescription Drug Improvement, and Modernization Act (MMA) of 2003 is the essential piece of legislation that created what Medicare Part D provisions (Frank & Newhouse, 2008) are in place currently. While this provision provides low-income older Americans with necessary medications, within the initial bill, the governmental program suffers a loss of autonomy. Under this bill, the government is barred from engaging in negotiations with pharmaceutical companies through the “noninterference” clause (Cubanski and Neuman, 2015). This prohibition …show more content…
In a 2015 study that examined the effect on Medicare Part D on the mortality rates of adults 65 and older, it was found that the areas in which the drug expenditures were increased the most upon implementation were the ones most affected overall (Dunn & Hale Shapiro, 2015). Cardiovascular Disease, one of the leading causes of death in the United States, experienced a large decrease in its mortality rates in these locations that were found to be most affected (Dunn & Hale Shapiro, 2015). In total, the analysis estimated that up to 26,000 more individuals lived upon the first year of Part D’s application (Dunn & Hale Shapiro, 2015). This suggests that there is a strong correlation between the increase in access to drugs among the older community and health outcomes. This not only creates a healthier country, but also has positive economic consequences, as less money is put forth towards costly emergency care. The reduction of Medicare Part D benefits could jeopardize this progress, thus leading to a public health hazard and burden on the …show more content…
As companies continue to develop new, innovative products, they gain the advantage that comes from a lack of substitutes that insurers can present. This encourages large pharmaceutical companies to spend money on lobbying to greater influence large decisions made in the executive and legislative branches and maintain their monopolies. In 2014, five major drug companies reported to have increased expenses allotted for lobbying by one million dollars (NCPSSM, 2014). In the long run, this gives large corporations more favorability in the legislation that is enacted on matters concerning Medicare Part D and other drug disputes, creating an unequal advantage. This is most clearly represented in the figure below that outlines how much drug lobbyists have given in terms of donations to politicians. This in turn misrepresents the population that is affected by the decisions made by the government and leaves consumers to deal with the
Historically the United States of America took pride in free trade and capitalism. Taxes on goods was a key driving force that began the American Revolution and later developed the power-house country present today. So, it is no wonder that when the Affordable Care Act (ACA) incurred new tax reforms, it was far from a smooth transition. In particular, pharmaceutical companies were hit the hardest. Within a ten year span, the drug industry will collectively have to pay $85 billion to the American government.1
The essential target of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) was to furnish seniors in the United States with moderate scope for their physician endorsed solutions through the new Medicare Part D professionally prescribed medication advantage. After the MMA was implemented—however before Part D was actualized—there was a disagreement about the cost of the program. In March 2004, the Medicare Chief Actuary affirmed before the House Ways and Means Committee of United States Congress that he was requested by the (Centers for Medicare and Medicaid Services) CMS Administrator to smother his assessments of the ten-year cost of the program, which were considerably more noteworthy than unique Congressional Budget
The pharmaceutical and biotech industry agreed to contribute billions of dollars to healthcare reform. Having agreed early in political negotiations to contribute any-where from an estimated $80 billion to $105 billion in fees, rebates, and discounts to help move the legislation forward (Nussbaum, 2010). By agreeing to support healthcare reform with their money and policies, they were able to avoid issues that had plaques their industries for years such as drug importation and the ability to negotiate drug prices for Medicare D. In return, the pharmaceuticals and biotech firms would agree to discount drugs purchased by Medicare beneficiaries, affected by the doughnut hole, of the Part D program by 50 percent (Spatz, 2010). Congress also proposed additional government subsidies to be added to the discounts that would further shrink the gap; beneficiaries will pay 25 percent copayment
The cost of health care has been at the forefront of politics for years. It is one of the most talked about topics not just in political venues but also country wide. Every American has an opinion on how our economy can be fixed and they are passionate about health care reform. The price of insurance alone causes many Americans to not have coverage. For those that can afford coverage, the struggle to pay co pays is immensely crippling their bank accounts. Of these burdens on Americans today, the most frightening fact lies in the cost of prescription medications.
One of this health care’s programs objective is to limit the number of uninsured (Shi & Singh, 2015). This controversial healthcare plan incorporates a privately funded insurance which is paid for through employment and solely by the patient and a publicly funded insurance by the government. Medicare is provided for senior citizens 65 and older, and Medicaid is provided for low income citizens. The federal government and state government both partake in the funding of Medicaid. Although insurance is provided to the low income through Medicaid, the United States continues to suffer from cost escalation spending 17.1 percent of GDP on healthcare in 2013, a 50 percent more than the second nation (Commonwealth, n.d.) The high cost and limited coverage continues to spark up the conversation for a
Part D decreases their out of pocket expenses for prescription drugs for a lot of people. Therefore, a great decrease is recognized by patients with extremely high annual expenses for prescription medication. Though, Part D cost patients with low income more then what they previously paid to its adoption when state Medicaid programs covered them. The legislation that established Part D forbids Medicare from negotiating lower prices with drug manufacturers. As a result of an increase in costs of prescription medications frequently passed to the benefit recipients (Mathews, 2006). The legislation are groups that influenced the final outcome of Medicare Part D.
The Pharmaceutical lobbyist has a very powerful impact on the outcome of Medicare Part D. They were the ones that wrote the bill and presented it to the House and ultimately, it was passed. However, the tactics that were used were extremely questionable and unethical. A Democratic Representative from Michigan stated: “I can tell you when the bill passed, there were better than 1,000 pharmaceutical lobbyists working on this” (Singer, 2007). The
A large amount of the expensive drug provisions is falling on beneficiaries falling within this gap that causes them to spend more than they would normally as they’re strive to get into the upper range of coverage. This structure allows the increasing role of private plans to determine the success of the program by whether it “conflicts with or enhances the effectiveness” its goals. (Guterman & Huynh , 2006) The upper and lower limits making up the coverage gap have been proven to be unrealistic. “According to a Kaiser Family Foundation study, in 2003, the average total spending for prescription drugs in the Medicare population was $2,322. Four of 10 beneficiaries had drug costs greater than $2,000.” (Brinckerhoff & Coleman, 2005)A majority of these individuals then find themselves in the “doughnut hole” that makes them continues to spend, maybe unlike they normally would without this coverage, until they reach the top of the gap. Also in the study, 1 out of 10 beneficiaries had total drug costs more then $5,000, which is proven to be extremely expensive and
The passage of the Medicare Drug Price Negotiation Act will also inadvertently increase access to many types of medications for individuals who qualify for Medicare Part D. There is a clause within the bill that would establish rebates to be paid by pharmaceutical companies for low-income beneficiaries. These rebates, in addition to lowered costs, would considerably lessen the financial burden placed on low-income beneficiaries. This will allow more individuals greater access to expensive medications. As an example, each year, financial reasons hinder about 16% of diabetic Part D beneficiaries from filling at least one of their prescriptions (Williams, Steers, Ettner, Mangione, & Duru, 2013). This increase in access will help mitigate the occurrence of cost-related nonadherence to prescription medications, and other such consequences
Through the years doctors’ and pharmaceutical companies have become greedy. Doctors diagnose patients, prescribe medications, and send them to pharmaceutical companies that charge high prices for medications that help maintain their well-being. Although over half of our elderly individuals with Social Security and Medicare benefits are already struggling to accommodate their ends. Therefore a reform of both Social Security and Medicare needs to take place before it is too late. Social Security and Medicare funding will be the most important problem that America will face in the coming decade.
Author Donald A Barr defines the Medicare program. “The federal Medicare program is our system of universal health insurance for everyone sixty-five years old or older paid through a general withholding tax” (Barr 131). Unfortunately, the United States Medicare system is financially unstable. “Medicare is spending more money than they are bringing in…Policymakers are looking at several different options that will alter the Medicare program significantly” (WPC 2). In turn, a high number of companies and organizations are investing their time and revenue into lobbying to make healthcare changes. Joe Eaton from the Center for Public Integrity shares “More than 1,750 corporations and organizations hired about 4,525 lobbyists — eight for each member of Congress — to influence health reform bills in 2009” (Eaton). The objective for special interest groups is to pull financial resources together to be a force of influence. Granted there is strength in numbers, for example, the American Association of Retired Persons (AARP) “deployed fifty-six in-house lobbyists and two from outside firms to work the issue on behalf of its members. Also, American Medical Association (AMA), “spent $20 million overall in 2009 lobbying Congress on behalf of doctors” (Eaton). The AMA was successful in removing a $300 fee for physicians that participate in Medicare and Medicaid. Furthermore, the AMA advocated for budget cuts for higher income Medicare subscribers and payment cuts for Medicare biller’s
The Patient Protection and Affordable Care Act (Obamacare) had mame dramatic changes in the field of the health care system, especially in Medicare, that will seriously take effect in American seniors. Indeed, much of the health law’s new spending is financed by spending reductions in the Medicare program. In addition to the provider payment reductions, Obamacare significantly reduces payments to Medicare Advantage (MA) plans by an estimated $156 billion from 2013 to 2022.( Elmendorf, letter to Speaker Boehner). About 27 percent of all Medicare beneficiaries are enrolled in MA plans, a system of regulated and private plans competing against each other as an alternative to traditional Medicare. MA plans are attractive to beneficiaries because they offer more generous and comprehensive coverage than traditional Medicare by capping out-of-pocket costs and offering drug coverage to a rasonable
The concept is built on trade-offs meaning that one aspect cannot be affected without affecting the other two. The most common view of this problem is that each aspect is in direct competition with the others. Analyzing Medicare in relation to The Iron Triangle, consumers who participate in the healthcare system through Medicare must still pay deductibles, fees and other costs not covered by the program. Additionally, enrollees who choose non-hospital coverage or Part B will have to pay a premium. In 1993, up to 11% of Medicare participants were also enrolled in Medicaid programs which pay expenses for the poor who may qualify for the benefits. Approximately 75% of Medicare enrollees have some form of health insurance coverage (Gok & Rubin p.1520). Younger participants don’t seem to fare as well within Medicare since the program focuses predominantly on people 65 and over. Too often, the role that Medicare plays in the younger population with disabilities is overlooked. A Kaiser Family Foundation survey drawn from administrative data provided by Centers for Medicare and Medicaid Services (CMS) found that non-elderly disabled beneficiaries reported problems with healthcare access and cost. Opinions have varied on the success and failures of Medicare in relation to overall access and cost. “According to (CMM) Centers for Medicare and Medicaid Services, total healthcare expenditures exceeded $2.1 trillion or more than $7000 for every American man, woman, and child” (Kuttner p.549). Total healthcare spending in 2006 was 16% of the GDP and was projected to reach 20% by 2013. The phenomenon known as “medical inflation” is believed to have contributed to rising costs of healthcare. An aging population, technology advancement, litigation, defensive medicine and insurance coverage that favors high taxes. The most common
Due to the upcoming presidential election, the two major political parties, and their candidates, have been focusing on the primary problems that the nation will face. Chief among those problems is the future of Medicare, the national health-insurance plan. Medicare was enacted in 1965, under the administration of Lyndon B. Johnson, in order to provide health insurance for retired citizens and the disabled (Ryan). The Medicare program covers most people aged 65 or older, as well as handicapped people who enroll in the program, and consists of two health plans: a hospital insurance plan (part A) and a medical insurance plan (part B) (Marmor 22). Before Medicare, many Americans didn't have health
The health care debate has been a tricky one over the years with legislators ongoing decision on whether rules should be put in place that would even out the playing field between regular folk and health insurance companies. Obtaining affordable health care has been difficult for many and has raised some eyebrows about how these health care companies continue to make billions of dollars a year while people’s health continue to suffer. In 2010, a health care reform, the Affordable Care Act or “Obamacare”, was signed into law which eliminated those obstacles and limitations set forth by the healthcare industry.