Proposed Healthcare Bill’s impact on Medicare’s PDP Coverage

The legislation, known as the American Health Care Act, has been scrutinized by all sides since it debuted earlier this month. This week,lawmakers are reworking the bill to give states more flexibility under Medicaid and to help older Americans afford coverage on the individual market before the full House votes on the bill on Thursday.

While these provisions deal with changes for individuals buying their own coverage and those on Medicaid, Americans over the age of 65 are wondering how the pending law affects the price of their medications.

Medicare doesn’t cover all healthcare costs, which is why seniors are concerned what will happen to Medicare’s prescription drug coverage (Part D) under the American Health Care Act. For many boomers, their health needs require a significant amount of spending on prescription drugs, pushing them into the “doughnut-hole,” the coverage gap that occurs when the cost of medications exceeds one’s limit for the year. When seniors reach this coverage gap they are forced to pay far more for prescriptions until the year ends and their budget resets.

Since the Affordable Care Act (ACA, Obamacare) was instituted, one of the initiatives of the legislation was to close the “doughnut hole” incrementally for seniors. Since 2013, the ACA has addressed this issue, creating a graduated program with tax provisions and discounted drug pricing to eventually lower the amount seniors pay for prescriptions in the coverage gap to 25 percent by 2020. (In 2017, Part D beneficiaries pay 51 percent of the cost of generic prescriptions and 40 percent for brand-name medications.)

Seniors don’t want to see the doughnut hole become wider, especially since it’s just three short years until 2020. Since the enactment of the law, more than 11.8 million Medicare beneficiaries have saved over $26.8 billion on prescription drugs. Additionally, Medicare has saved on Part D drug costs, according to a recent report.

So what impact would the repeal and replacement of ACA with the American Health Care Act have on the cost of prescription drugs for seniors?

While the bill doesn’t specifically state what would happen to Medicare’s prescription drug coverage, the proposed bill does not repeal the Medicare Part D coverage gap protections created under ACA. This year, the coverage gap begins after a Medicare beneficiary spends $3,700 on covered prescription drugs; if the ACA protections were repealed, seniors would pay an average of $1,950 more in drug costs. However, while the doughnut hole protections remain in place, the proposed GOP legislation would remove the fee on manufacturers and importers of branded prescription drugs, taxes that were used to fund the closing of the Part D coverage gap.

Although President Trump is adamant that healthcare needs to be overhauled, under ACA, Medicare has been working efficiently for many seniors. While more could be done to reduce the burden of prescription drug costs, ACA has made strides in reducing the out-of-pocket costs for Medicare seniors who fall into the coverage gap (which is statistically one in every five beneficiaries).

If the American Health Care Act is going to work, it can’t ignore the positive impact ACA has had on reducing prescription drug costs and allow millions of Americans to fall back into the doughnut hole. While lawmakers in Washington rework and reshape the bill beforeThursday’s House vote, it’s seniors who will be following closely.