How the H.R.3. Bill Will Impact Medicare
Prescription drugs can come with crippling debt, especially for those who depend on medications for daily living. Too many citizens throughout America feel this weight of high-cost prescription medications. Finally, Representatives presented a new Act called the H.R.3. Bill that could help Americans afford their medications.
What is H.R.3. Bill
The H.R.3 Act is also known as the Elijah E. Cummings Lower Drug Costs Now Act. The H.R.3. Bill will allow the Health & Human Services to negotiate the best prices every year. At least 50 brand-name drugs and a maximum of 250 can be subject to negotiations.
The Act would allow the government to begin negotiations at 120% of the average price for that drug. That average is calculated using six other developed nations’ costs for that drug.
The negotiations would focus on medications with the most significant savings potential. A recent study shows that 79 drugs in the U.S. are almost four times higher than those in similar countries.
Drug companies will need to pay a rebate to the government if their drug pricing grows faster than inflation — the H.R.3. Bill can impact Americans with both Medicare coverage, as well as private insurance plans.
How Will H.R.3 Impact Medicare
Medicare is sure to see the impacts of the H.R.3. Bill. Most would say we can expect to see good things come from this Act. Medicare will have the ability to negotiate with drug companies to make medications more affordable.
Beneficiaries can take comfort in having Medicare take charge of negotiations and will keep access to the medications they need. Currently, those on Medicare often pay twice the amount for their medicines in the U.S. than in other developed countries.
Pharmaceutical companies increase their prices over time to increase profits. Americans have a hard time keeping up with these inflated costs.
Almost 1 in 4 Americans find it increasingly difficult to afford their drugs. People may even worsen their health conditions by rationing their medications because of the steep price tags. 1 in 4 people with diabetes ration insulin because of ever-growing prices.
The majority of citizens like the idea of allowing the government to negotiate drug pricing. Eighty-five percent of people support this idea to reduce drug prices. The Congressional Budget Office (CBO) estimates that the H.R.3. could result in reductions of 55 percent in Part D net costs for the initial group of drugs to go through negotiations. A discount of 40 to 50 percent can undergo price negotiations in the following years.
The Bill may also reduce pricing for new prescriptions that could become expensive in the future. Lower drug prices will benefit people with commercial insurance. Lower drug prices will also help those on Medicare.
Could Save the Government $500 Billion
Should pharmaceutical companies refuse to participate, they could face financial penalties. The CBO believes that cracking down on manufacturers could save the government almost $500 billion within ten years. Money preserved through this Act could funnel back into the Medicare program and can aid in helping even more seniors.
The Bill could allow Part D beneficiaries to save on their monthly premiums. Recipients who have yet to meet their policy’s deductible could save hundreds in out-of-pocket costs.
The CBO estimates that they’d benefit from lower monthly premiums. H.R.3. can use federal savings to cover new out-of-pocket maximums for Part D beneficiaries.
Benefits of the H.R.3. Act
The H.R.3 Bill can present some outstanding advantages, not only to the government but citizens as well.
The bill can:
- Order pharmaceutical corporations to consult directly with the CMS on the costs of certain medications.
- Set price caps for medications. A drug’s price cannot exceed 120% of the standard rate in other countries, like Australia, Canada, Japan, and the United Kingdom.
- Penalize manufacturers who refuse to adjust prices. Companies can receive fines that start at 65% of their prescriptions’ yearly gross sales and can increases by 10% increments, up to 95%.
- Generate a $2,000 out-of-pocket limit on drug costs for Part D recipients.
- It can ban pharmaceutical companies from increasing prices above inflation rates.
Impact on Providers
Many people worry that the lower prices we see from the H.R.3 Bill could lead to less available drugs. According to the CBO, lower costs “would immediately lower current and expected future revenues for drug manufacturers, change manufacturers’ incentives, and have broad effects on the drug market.” Should a drug company refuse to negotiate, they could withdraw their drug from the U.S. market.
Drug manufacturers’ revenues are already astronomical. We continue to tell Americans they need to prepare for healthcare costs in retirement, even though it’s impossible to predict how much their healthcare will cost.
Are they supposed to prepare for 2-4 times the amount they would pay currently for a medication, as well as calculate any inflation? It has to stop somewhere. Our priority should be the consumer, not the manufactures.
In a letter to Representatives from the Chamber, “By imposing government price controls on prescription drugs, H.R.3. will reduce investments in medical research, put at risk over 700,000 American jobs, and potentially shift cutting-edge medical research to foreign countries, like China. Further, H.R.3. sets a dangerous precedent. If Congress can impose price controls on prescription drugs, why not on hospital and physician treatments?”
Why not price controls on hospital and physician treatments? Medicare already has price controls on what they pay to hospitals and physicians. It’s called Medicare Assignment. When a doctor accepts Medicare Assignment, they agree to accept the negotiated Medicare-approved cost for that service. Those in the Medicare space would say we should also have some control over the costs of prescription drugs. The H.R.3. Act may be the solution.
Will the 2020 Election Impact the H.R.3. Act?
Anyone who was watching the President’s State of the Union Address recently can attest to witnessing the division between party lines. President Trump advised lawmakers to present legislation that will help lower drug prices. In response to this request, Democrats stood and raised three fingers in the air to represent the H.R.3. Bill.
A Bi-Partisan move to lower drug costs proves to be as Partisan as most other subjects in our nation today. Two Democratic candidates in the upcoming election are siding with Progressives in wanting to add to the Bill.
Both Bernie Sanders and Elizabeth Warren feel that the H.R.3. Bill will benefit from increasing the number of medications to negotiate. Another push from Progressives is to provide fair prices to uninsured Americans.
It’s no surprise that the 2020 elections will touch on several different things. Affordable healthcare and drugs for Americans are a couple of talking points. The high price of medications impacts so many people, both young and old. We will see an increase in differing views regarding the Elijah E. Cummings Lower Drug Costs Now Act.
End the Medicare Negotiation Ban
Pharmaceutical companies’ prices are crushing Americans. Something has to be done. The only individuals that seem to be against the H.R.3. Act are the individuals making significant profit off these unfairly overpriced medications. We need to hold these companies accountable for their actions and take control of our healthcare system by ending the Medicare negotiation ban.