The Congressional Budget Office (CBO) missed $4 billion in savings evaluating changes to Medicare Part D by Congress.
Initially the Bipartisan Budget Act of 2018 had estimated saving Medicare $7.7 billion over the period of 10 years, but oversight from the CBO found that legislative changes to the drug discount program yielded $11.8 billion in savings.
When a Medicare beneficiary has drug costs that exceeds the amount of their Part D plan coverage, the “donut hole” period is born and drug companies are obligated to provide higher discounts to enrollees. In the budget bill Congress increased these discounts from 50 to 70 percent for brand-name drugs.
In a letter addressed to Rep. Mark Meadows, CBO director Kieth Hall said:
“CBO worked closely with CMS staff members to gather information, and reviewed data on the CMS website, but it did not become aware of administrative data about the amount of the discounts provided under the coverage gap discount program until after the estimate was published. Had CBO been aware of that information at the time, the estimate would have been different.”
According to Modern Healthcare, “Republican think tanks” and other advocates have launched damage control efforts to void the changes made to Part D now that the numbers are all worked out. They are afraid the financial impact may cause drug companies to limit the product line offered under Part D.
Organizations like the National Taxpayers Union and Americans for Tax Reform banded together in a joint letter to House Speaker Paul Ryan.
They said, “the potential loss of robust private sector competition in Part D could lead to higher premiums and out-of-pocket costs over time. It could endanger access to medicines, many of which actually reduce net long-term Medicare costs by preventing expensive hospital stays, surgeries, and other therapies.”
The letter also read:
“…the Part D alterations endanger the free market health reform agenda of the Republican Congress and President Trump. We need to give people more and better health care choices, not take away or threaten the ones they already have. We need to lower the costs of prescription drugs without government takeovers, bailouts, or price controls.”
Drug companies are also keeping their fingers crossed that the CBO’s recent findings will encourage them to change certain actions.
To read Modern Healthcare’s article, click here.
For the letter to Rep. Mark Meadows, click here.
Click here for the full letter to Speaker of the House Paul Ryan.