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
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
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
The Medicare Drug Price Negotiation Act (S. 2011) would amend Title XVIII of the Social Security Act to allow for the negotiation of drug prices on behalf of Medicare beneficiaries for those medications covered under Medicare Part D. The policy would be enacted at the federal level, and the policy tool used to do so would be federal funding. Under this bill, the Secretary of the Department of Health and Human Services (DHHS) would be given the power to negotiate drug prices as well as establish and apply a specific formulary for Medicare-covered prescription drugs. Past rhetoric had implied that Donald Trump would have supported this bill; he condemned the role of pharmaceutical companies creating high drug prices as
In 2010, the Affordable Care Act created a $250 rebate if the Medicare beneficiary was in the coverage gap. It also expanded coverage to the discounts given on brand name prescriptions. With reforms and improvement comes disadvantage to others. Beneficiaries and patients will be able to start saving more money, but it comes with a decline for the drug providers. According to Health Capital Consultants, “over ten years, closing the coverage gap may ultimately cost approximately $32 billion” and the pharmaceutical industry will be forced to take on most of this burden. These companies are paying for the flexibility they’re been given by MMA. They can “set their premiums, design their own formularies and are free to use cost management tools” and Medicare will reimburse plans for a “share of their drug costs.” (Guterman & Huynh ,
This article discusses about the impact of Medicare coverage expansion under the Affordable Care Act (ACA). In 2011, the Medicare coverage was expanded to fully cover preventive care visits; the annual wellness visit for the Medicare beneficiaries (Chung et al., 2015). The wide range of preventive services such as a review of the patient’s medical and family history; the measurement and recording of biometrics such as blood pressure and body-mass index; screening for cognitive impairment, depression, functional ability, and level of safety; planning end-of-life care; and education, counseling, and referrals for other personalized preventive services are covered under the annual wellness visit. Chung and colleagues conducted a study to determine the use of preventive care visits among older adults, who live in the Northern California. They looked at the data from 2007 through 2013, to assess the utilization of preventive services before and after the expansion among the Medicare fee-for service; also known as Medicare Part B enrollees. In addition, the usage among Medicare Part B enrollees were compared with the Medicare health maintenance organization (HMO) plan; also known as Medicare Advantage and private insurance.
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
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 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 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
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.
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.
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.
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
One of the problems of Medicare itself is that it doesn't cover the costs of prescription drugs for its members; this has led to one of the major reasons that the program is in danger. A great deal of personal healthcare relies on the use of drugs, and since the program doesn't cover these costs, the individual must bear them. According to the AARP, in 1999 out-of-pocket costs for prescription drugs were estimated to be $450 per person each year (AARP). Obviously, members have joined the program to defray their medical costs, but these figures indicate that they still have large costs to pay. The other problem faced by the Medicare program is that it is also suffering from a lack of funds. According to Governor George W. Bush, the financial health of Medicare is in serious jeopardy and might face deficit as soon as 2010 (Bush). As a result of these major problems, one might wonder why the plan isn't scrapped for another program; well according to polls done by the Public Agenda, an Internet public policy site, American citizens are strongly in favor of Medicare, and would rather see the problems ironed out (Public Agenda). Therefore it is necessary to come up with a solution, so that the Medicare program remains intact.
When it comes to the topic of prescription drugs being regulated, most of us will readily agree that this is a big concern for many Americans. Where this argument usually ends, however, is on the question of why do Americans pay some of the highest prices for prescription drugs compared to other countries. Whereas some are convinced that these high costs are set solely for the fact of the amount of money spent on producing these drugs, others maintain that there is an opportunity for medication prices to be regulated and also an opportunity to allow Medicare to negotiate with pharmaceuticals and possibly help bring down those high prices . I agree that prescription drugs should be regulated because there are many people that are victimized