Consumers Union Makes Case for Medicare to Negotiate Drug Prices |
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Written by U.S. Insurance News
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Friday, 11 January 2008 |
With many private Medicare drug plans jacking up the cost of prescriptions for seniors, the Consumers Union is arguing that now is the time for the government to intervene.
With many private Medicare drug plans jacking up the cost of prescriptions for seniors, the Consumers Union is arguing that now is the time for the government to intervene.
Consumers Union, which publishes Consumers Report, used the Medicare.gov Web site to track the costs of five prescription drugs offered by private Part D plans in five highly populated states since the program began in December 2005. What they found most recently is startling.
Seventy-five percent of Medicare drug plans continue to increase the cost of prescriptions for seniors—with an average increase of $369 for five commonly used drugs—between December and January alone. Roughly one in six plans that were tracked increased prices on the five drugs by more than $500 during that time. However, about 25 percent of plans decreased the costs for the five drugs during that time, with an average drop of $220.
All told, most insurance companies have increased the cost of the drugs at least two to three times the cost of inflation. Bill Vaughan, senior policy analyst for Consumers Union, said these price increases “torpedo” claims by the insurance industry that it is helping seniors get the best deal on Medicare drug plans.
“These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America’s taxpayers and seniors, and offering the option of a Medicare-run drug benefit,” Vaughan said.
In addition to these findings from Consumers Union, a new report from the Annals of Internal Medicine shows the Medicare Part D program saved beneficiaries on average about only $6 to $9 a month on prescriptions over what older Americans who are not yet eligible for Medicare pay.
Vaughan believes Annals report underscores the need for Congress to allow drug price negotiation.
“Considering the Medicare drug program costs taxpayers about $60 billion a year—and that number will double in about five years—it seems incumbent on Congress to get better savings for seniors than $9 a month on their prescriptions,” he said.
When Congress passed the Medicare Part D program in 2003, lawmakers refused to give Medicare the power to negotiate lower drug prices, as the Department of Veterans Affairs does. The House last year passed a bill to give the government the power to bargain on behalf of private insurance plans, but the Senate was not able to pass a similar bill.
Beneficiaries are allowed to switch plans during open enrollment from mid-November to December 31 each year, and the price increases seem to coincide with the end of open enrollment season. Vaughan said that shows why it’s important for Plan D participants to use the open enrollment period to check their plan’s drug prices.
“Otherwise, the first January visit to the pharmacy can be a shock,” he said.
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