An article in today's NY Times by Robert Pear reports that health reform will actually help decrease total prescription drug spending for Medicare beneficiaries. I wanted to write on highlights of the article because so much misinformation is circulating about how Medicare will change and how reform will affect seniors.
Pear's article was based on a Congressional Budget Office (CBO) report that stated that individual premiums for prescriptions may increase ,but the total spending for a beneficiary will fall. CBO also said that drug-related provisions of the House bill would save the federal government $30 billion from 2010 to 2019. AARP even endorses that health reform will lower drug costs for seniors.
The proposed health reform legislation would drop drug spending in two ways.
1. It will require drug companies to provide larger discounts on medication dispensed to low-income people eligible for both Medicare and Medicaid.
2. It would also require drug makers to provide a 50 percent discounts on brand-name drugs for beneficiaries experiencing the "doughnut hole" until the coverage gap is eliminated.
It should be noted, that those who use a relatively small amount of prescription drugs would pay more in additional premiums than they would save. While those who use a large amount of drugs would gain more from eliminating the "doughnut hole" than they would pay in higher premiums.
Reform of Medicare Part D (which deals with all the prescription drug coverage) attempts to protect Medicare beneficiaries who are the sickest (those needing the most number of medications) and most financially at risk (eligible for both Medicare and Medicaid).
Sounds right to me.