Tag Archives for Medicare Part D

Trustee reports: Social Security and Medicare still face financial woes

Published in RINewsToday on April 10, 2023

Over a week ago, the Trustees of the Social Security and Medicare trust funds released their annual reports on the financial health of these two programs. As in prior years, the trustees found that the Social Security and Medicare programs both continue to face significant financing issues.

The latest Social Security projections show the program is quickly heading toward insolvency and calls for Congress to find policy solutions sooner rather than later to prevent abrupt changes to tax or benefit levels.  The Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM) and other aging advocates are urging Congress to take prompt action to strengthen and expand Social Security, while Republicans have been calling for cuts to future retirees’ benefits and at least partly privatizing the program. 

This 270- page 2023 Social Security Trustees Report warns that if Congress does not act, Social Security’s Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds, which help support payouts for the elderly, survivors and disabled, will become depleted in 2033 (that’s a year earlier than forecast last year), becoming totally insolvent in 2034 when beneficiaries would only receive about 80% of their scheduled benefits. 

According to the Social Security Administration (SSA), roughly 66 million people received monthly Social Security checks in 2022 (175,840 in Rhode Island). A vast majority, or about 57 million of those beneficiaries, received benefits through the OASI Trust Fund, compared to nearly 9 million people who received benefits through the DI Trust Fund. 

The trustees say that Social Security funds would be fully depleted in 2034 because of expectations of a slowed economy and reduce labor productivity, considering inflation and economic input.

Although the DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period, being able to pay full benefits through 2097, the combined Social Security funds would only be able to pay 80% of the scheduled benefits after 2034, says the trustees report.

Taking a look at Medicare’s fiscal health

Medicare, the hospital insurance trust fund referred to as Medicare Part A, will only be able to pay scheduled benefits in full until 2031, according to the 273-page trustees’ annual report. The program covered 65 million seniors and people with disabilities in 2022, and will only be able to cover89% of total scheduledbenefits at that time.

Although the Medicare Part A Hospital Insurance trust fund will become insolvent in just eight years, Medicare spending as a whole (including Parts A, B, D, and Medicare Advantage, will continue to grow over the coming years.

The Medicare Trustees project a shortfall of 0.62 percent of payroll, or 0.3 percent of Gross Domestic Product (GDP), noting that it would take about a 21 percent (0.6 percentage point) increase in the payroll tax rate or a 13 percent spending cut to restore the program’s solvency.

The improvement of Medicare’s hospital trust fund’s finances over last year’s projections can be tied to lower estimates for health care spending after the height of the Covid-19 pandemic along with more projected income that the trustees estimate coming from a larger number of covered.

Dueling political statements

With the Social Security and Medicare Trust Fund reports released on March 31, 2023, the Chair and Ranking Members of the House Ways and Means (HWM) were quick to issue dueling statements to give their political spins. HMW’s Subcommittee on Social Security has jurisdiction on bills and matters related to the Social Security Act.

House Ways and Means Chairman Jason Smith (R-Missouri) charged that reckless Democratic spending has impacted the financial viability of the Social Security and Medicare Programs.  “Thanks to President Biden’s economic failures, seniors’ hard-earned benefits are further under threat. Social Security’s combined trust funds are expected to become insolvent a full year sooner than forecast in the previous report as a result of a slowed economy and Democrats’ inflation continuing to outpace wage growth. And Medicare’s latest report comes amidst Biden’s plans to slash seniors’ access to innovative new cures and treatments,” says Smith, stressing that “the first step to protecting these programs is “growing the economy – not budget gimmicks or tax increases that hold back economic growth.

On the other hand, House Ways and Means Committee Ranking Member Richard E. Neal (D-MA) counters Smith’s political perspective. “While Democrats are committed to the long-term health of these programs, Republicans are launching another shameful assault on the economic well-being of millions of workers and retirees with their plan to make drastic cuts to Social Security and Medicare, warns Neal. “Their playbook is clear: slashing a critical resource that Americans have rightfully earned to give another tax cut to the top 1%. Democrats won’t let their reckless attacks stand, and we will continue to defend and protect Social Security and Medicare for generations to come.”

Rhode Island Congressmen were quick to give their comments about the release of the two trustee reports, too. “Unlike the nearly three-quarters of House Republicans who endorsed slashing Social Security in 2022 – reducing benefits by $729 billion over 10 years – House Democrats are working to protect Social Security for generations to come,” says Congressman David N. Cicilline, representing Congressional District 1.  Cicilline, who is retiring his seat on May 31, 2023, has pushed to expand and strengthen Social Security over his six-terms in office.

Cicilline asks: “Sixty-six million Americans rely on this essential program to make ends meet and we cannot allow Republicans to make any cuts to this hard-earned benefit. The drug spending savings implemented by our Inflation Reduction Act will not only keep money in seniors’ pockets but will also drive down costs to Medicare itself. We’ve been taking real action to strengthen these programs and help our seniors – what have Republicans done?”  

As Rhode Island’s newly elected Congressman, Seth Magaziner says he will “fight tooth and nail to protect Rhode Islander’s hard-won Social Security benefits.”   In responding to the trustee’s report about Social Security’s financial woes, Magaziner called for raising the cap on Social Security taxes, forcing “millionaires and billionaires to pay the same rate as teachers and fire fighters.”

“I stand ready to work with anyone who is serious about strengthening Social Security, not cutting hard-earned benefits,” says Magaziner. 

While there are few fixes being proposed by either party or leader, some fixes identified by the Program for Public Consultation at the University of Maryland that “Americans might be willing to support” include:

–        raising the Social Security payroll tax cap

–        reducing benefits for high earners

–        gradually raising the retirement age

–        increasing the payroll tax

–        raising the minimum benefit

–        changing cost-of-living adjustment calculations

–        increasing benefits for beneficiaries over age 80

Social Security advocacy group gives its two cents

“Contrary to conservative claims, Social Security is not ‘going bankrupt’; the program will always be able to pay benefits because of ongoing contributions from workers and employers. In fact, this is yet another Trustees report showing that Social Security remains strong in the face of turmoil in the rest of the economy,” says Max Richtman, NCPSSM’s President and CEO in a release on the Social Security Trustee Report. He notes that the program’s insolvency date has stayed roughly the same even after a global pandemic and recent economic upheavals. 

Congress can strengthen Social Security by bringing in additional revenues into the program, says Richtman.  NCPSSM endorses legislation introduced by Senator Bernie Sanders (D-Vermont) and Congressman John Larson (D-Connecticut) to keep the trust fund solvent for the rest of this century while expanding program benefits.  Both bills would adjust the Social Security payroll wage cap so that higher-income earners begin contributing their fair share, he notes.

As to Medicare, in a release Richtman called on Congress to take “pre-emptive action now” to protect the Medicare Part A trust fund from becoming depleted in 2031, three years later than estimated in their previous report, at which time Medicare could still pay 89% of benefits.  

“Beyond trust fund solvency, the Trustees reported that the standard Medicare Part B premium will rise next year to $174.80 per month – a $10 or six percent monthly increase,” says Richtman. “Any increase is a burden to seniors living on fixed incomes, who too often must choose between paying monthly bills or filling prescriptions and getting proper health care.  Seniors need relief from rising premiums and skyrocketing out-of-pocket health care costs,” he said. 

“We support President Biden’s plan to strengthen Medicare’s finances, as laid out in his FY 2024 budget.  His plan would bring more revenue into the program, rather than cutting benefits as some Republicans have proposed.  Building on the prescription drug pricing reforms in the Inflation Reduction Act, the President’s budget proposal would lower Medicare’s prescription drug costs — and some of those savings would be used to extend the solvency of the Part A trust fund,” said Richtman.

For a copy of the 2023 Social Security Trustee Report, go to https://www.ssa.gov/OACT/TR/2023/.

For a copy of 2023 Medicare Trustee Report, go to https://www.cms.gov/oact/tr/2023.

AARP Rhode Island calls on Congress to act on lowering high drug costs

Published on March 14, 2022 in Rhode Island News Today

On the day before the Washington, DC-based AARP’s March 8th launch of its new ad campaign showing the impact of Congress’s failure to act on prescription drug prices, AARP Rhode Island State Director Catherine Taylor, Volunteer State President Marcus Mitchell and Volunteer Lead Federal Liaison Dr. Phil Zarlengo joined Rhode Island US Senators Jack Reed and Sheldon Whitehouse for a virtual news conference highlighting the need for Congress to act now to slash rising prescription drug costs. 

During the 26 minute and 45 second event, AARP Rhode Island, representing 132,000 members, delivered a petition signed by more than 16,114 Rhode Islanders, calling for Congress to act now and stop unfair drug prices. AARP has called for fair drug prices for years and supports legislation that passed the House in November, which would allow Medicare to negotiate drug prices, put a cap on out-of-pocket costs that older adults pay for their prescription drugs and impose penalties on drug companies that raise prices faster than the rate of inflation.

“Americans are fed up with paying three times what people in other countries pay for the same drugs. More than four million people across the country, including more than 16,000 here in the Ocean State, are joining AARP to demand lower prices for prescription drugs,” said Taylor in a statement announcing the petition being delivered to Reed and Whitehouse. “There will never be a better time to lower drug prices than the historic opportunity in front of Congress. Now is the time to get it done!” Taylor says.

Big Pharma makes billions from high drug costs

“Big Pharma is making billions while seniors and taxpayers are suffering,” says AARP State President Mitchell, noting that just last month Big Pharma raised the prices of 800 prescription medications.” People are sick and tired of paying three times for prescription drugs what people in other countries are paying for these drugs, “It’s outrageous and unacceptable,” Mitchell said.

According to Mitchell, “if consumer prices had risen as fast as drug prices during the last 15 years, gas would cost $12.20 a gallon and milk would cost $13 a gallon.” This gives perspective to this issue, he said.

“Big Pharma is trying again to scare lawmakers and members of AARP and everyone else with misleading claims to stop Medicare to negotiate prices, charged Zarlengo. “We, at least, know the truth. The truth is by allowing Medicare negotiation [of prices], that process will help seniors during these times of inflation by lowing their prices of drugs and putting more money in their pocket,” he said.

Zarlengo gave the two Rhode Island Senators a message from Rhode Island seniors: “Don’t let Pharma win this time, lets lower drug prices now.”

“We hear you loud and clear,” said Senator Reed, responding to the over 16,000 signees of AARP’s petition. “Congress must address this issue of drug pricing. The system continues to force families into untenable choices between their health and other basic needs. One of the simplest things to do is to allow the federal government to negotiate drug prices for Medicare beneficiaries. I have been urging administrations, both Republican and Democratic for more than a decade to do this,” he noted.

“The VA already does this,” said Senator Whitehouse told his fellow panelists and those tuning in to the March 7 news conference. “And there is a big discrepancy in what the Veterans Administration (VA) pays for drugs and what Medicare pays for drugs. We have a reconciliation bill still in the Senate; it’s something Democrats can pass with only 50 votes. The bad news is that we need all 50 members to agree on the reconciliation measure and that has proven difficult. I hope we can agree on a package that all 50 of us can sign off on… and finally, finally, finally give Americans the drug pricing relief that they need. AARP is incredibly important in this fight. All your members make a difference. Thank you for stepping up yet again,” he said.

AARP fights Big Pharma on television and with digital advertising

In AARP’s new ad campaign, Larry Zarzecki, a retired law enforcement officer with Parkinson’s Disease who was forced to sell his home in order to afford his medications, returns to the airways as a spokesperson for AARP, illustrating the impact of the high cost of prescription drugs on seniors.  The retiree first shared his story in an AARP ad three years ago, but Congress’ failure to act means he has had no relief from the high cost of his treatments. As he says in the new ad, “I shouldn’t have to decide between my home or my medicine because Congress refuses to act. I’m tired of waiting for Congress.”

AARP’s seven-figure ad buy includes television and digital advertising in the DC area, and television in Arizona, Colorado, Georgia, New Hampshire, New York, Nevada, and Pennsylvania.

Responding to AARP’s new ad campaign, AARP Rhode Island’s Taylor said: “Larry Zarzecki was forced to sell his home in order to afford his medications.  He is but one example of Congress’ failure to act. No one should have to give up a home in order to pay for over-priced prescription medicines.  She called on Congress to put a stop to “spiraling price increases” by giving Medicare the authority to negotiate with pharmaceutical companies for lower prices.

“If the Veterans Administration can do so – paying roughly half as much for brand name prescription drugs as does Medicare Part D – then why can’t Medicare?” says Taylor.  “For a decade, Big Pharma has spent more on stock buybacks and dividends than on research and development; it’s outrageous that drug makers are charging Americans three times what people in other countries pay for the same drugs and justifying it with lies and scare tactics that simply don’t hold up,” she  added.

AARP has called for lower drug prices for years and is urging the Senate to pass legislation that would allow Medicare to negotiate drug prices, put a cap on out-of-pocket costs that older adults pay for their prescription drugs and impose penalties on drug companies that raise prices faster than the rate of inflation.

“Americans are sick and tired of Congress’ broken promises to bring down the price of prescription drugs,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer announcing the launching of this ad campaign. “As Americans pay more and more for many consumer goods, Congress has an historic opportunity to lower drug prices and help seniors like Larry to afford their medications and other essentials,” she said.

It’s time to act NOW

According to AARP, without congressional action, pharmaceutical companies will continue to set high prices for prescription drugs and raise them without any warning or justification. The Washington, DC based advocacy group representing 38 million members recently released a report showing that 75 of the 100 brand name drugs with the highest total Medicare Part D spending have already increased their  list prices in the first month of 2022.

During the State of the Union, President Biden called for Congress to bring down the price of prescription drugs as a way to help consumers manage rising prices. The House of Representatives passed several prescription drug measures as part of the Build Back Better Act in November, but the Senate has yet to pass similar legislation.

It’s time for the Senate to put the welfare of the nation’s seniors first by passing legislation to put the brakes to spiraling prescription drug costs. This will be a hot campaign issue in the upcoming mid-term elections, just 230 days from now.

Using Savings from Drug Pricing Reform to Expand Medicare

Published in RINewsToday on June 7, 2021

Ahead of President Biden’s first address to a joint session of Congress on April 28 and as the Democratic administration considers policies to slash rising drug costs, the U.S. Government Accountability Office (GAO) released a 65-page report finding that the U.S. pays more than two to four times higher prices for a selected sample of 20 single source, brand name drugs than Australia, Canada and France. The latest GAO report, commissioned by Sen. Bernie Sanders (I-Vt.), found that Americans, suffering from blood clots, bronchitis, emphysema and Hepatitis C, were paying more for life-saving treatments than patients in these industrialized countries. 

“This important GAO study confirms what we all already know: the pharmaceutical industry is ripping off the American people,” said Sen. Sanders in a statement announcing the March 29th release of the GAO report, “Prescription Drugs: US Prices for Selected Brand Drugs Were Higher on Average Than Prices in Australia, Canada and France.”

“The time is long overdue for the United States to do what every major country on earth does: negotiate with the pharmaceutical companies to lower the outrageous price of prescription drugs. I would urge the president to put this proposal in the American Families Plan and use the savings to expand and improve Medicare for older Americans. We can no longer tolerate the American people paying, by far, the highest prices in the world for prescription drugs,” says the Vermont Senator who chairs the Senate’s Budget Committee.

U.S. Paying Outrageous Drug Prices

The GAO study found that in 2020, the U.S. paid 4.36 times more than France, 4.25 times more than Australia and 2.82 times more than Canada for the selected drugs, which represent a sample of the drugs with the highest Medicare Part D expenditures and use. The researchers noted that the publicly available data for the comparison countries were gross prices that did not reflect potential discounts. As a result, the actual differences between U.S. prices and those of the other countries were likely much larger than GAO estimates.

According to the GAO report, while France and Australia operate universal, publicly funded health systems that include prescription drug coverage, both Canada and the U.S. have a significant number of people who do not have prescription drug coverage. But even when comparing the full cash retail prices of selected drugs, the prices quoted to individuals without prescription drug coverage, GAO found that prices were two to eight times higher in the U.S. than the same drugs from pharmacies in Canada. 

For instance, GAO found that the cash price of Epclusa (28 tablets), which treats Hepatitis C, or an infection that attacks the liver, is $36,743 in the U.S. but $17,023.63 in Canada. The cash price of Harvoni (28 tablets), which also treats Hepatitis C, is $46,570.33 in the U.S. but $19,084.54 in Canada. In another example, GAO cited that the cash price of Incruse Ellipta Inhalation Powder (30 inhalations), which treats chronic obstructive pulmonary disease (COPD), or a group of lung diseases which block airflow and make it difficult to breath, is $411.33 in the U.S. but $53.31 in Canada.

Because France and Australia have universal health systems that cover prescription drugs, Australians would pay up to a $28.09 copay for a month supply of these medicines, while patients in France would pay anywhere from $0 to $34.03 for the drugs. The maximum copay that high income seniors with prescription drug coverage in Ontario, Canada would pay for the drugs is $4.67.

Robbing Peter to Pay Paul

On April 23, 48, organizations, led by Indivisible, Social Security Works and Public Citizen, called on Biden to include bold drug pricing reforms in American Families Plan to expand Medicare, and the result of a new polls supports this legislative action. 

Drug pricing reform will produce upward of $450 billion in savings over 10 years, note the organizations, urging Biden to use these savings to reinvest in Medicare. The call for adding dental, vision and hearing benefits to Medicare, lowering the Medicare eligibility age to 50 and creating an out-of-pocket cap for medical expenses.

Alongside the letter, the organizations released the findings of a new poll from Data for Progress, widespread public support across party lines for expanding and improving Medicare. The poll’s findings noted that 86% of Americans, including 82% of Republicans, support adding dental, hearing and vision benefits to Medicare. It also found that three-quarters of Democrats, a majority of independents, and nearly half of Republicans support lowering the Medicare eligibility age to 55. 

“Allowing Medicare to negotiate drug prices down saves money for the federal government, which is the largest buyer of prescription drugs in the world,” said Alex Lawson, Executive Director of Social Security Works. “We must pump those savings back into Medicare to expand eligibility and add benefits that equalize Medicare with private insurance,” he says.

“Lowering the Medicare eligibility age to 50, capping out-of-pocket costs, and expanding benefits to include dental, hearing, and vision would improve access to care for millions of Americans. Far too many Americans have lost their insurance or put off needed care due to the COVID-19 crisis,” said Eagan Kemp, Health Care Policy Advocate for Public Citizen. “The Biden Administration and Congress have a chance to deliver important progress at a crucial time,” he says.

Adds Mary Small, Legislative Director for Indivisible, “With the consequences of the COVID-19 pandemic still being felt in our communities, now is a crucial moment to expand public health care coverage and deliver savings on prescription drug prices to the American people. Lowering the Medicare eligibility age to 50 will be an essential step toward reducing the racial health inequities by increasing coverage to communities of color and low-income folks.”  She adds, “Allowing Medicare to negotiate prescription drug prices and then reinvesting those savings back into the program to expand services further strengthens our path toward universal coverage for all.” 

Last Thoughts

Garnering applause, Biden put high drug costs on his Administration’s radar screen at his recent address before Congress. “Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower drug prescription prices. It won’t just help people on Medicare. It will lower prescription drug costs for everyone,” said the 46th President of the United States. “We’ve talked about it long enough. Democrats and Republicans, let’s get it done this year,” he said.

But actions speak louder than words, say Washington Insiders.  They note that Biden’s American Families Plan, did not include any proposal to slash pharmaceutical costs or lower the Medicare eligibility age. Is it possible for Biden to lower the drug prices in the United States, making the prices more comparable to other industrialized countries and to even expand Medicare, in the face of fierce opposition from Republicans, moderate Senate Democrats and pharmaceutical companies?  

According to the latest KFF Health Tracking Poll released June 3, 2021, the findings indicate that “nearly nine in 10 (88%) favor allowing the federal government to negotiate for lower prices on medications, including three-fourths (77%) of Republicans, nine in 10 independents (89%) and 96% of Democrats.” However, support dwindles “when the public hears argument made by pharmaceutical companies that it could lead to less research and development for new drugs, or that access to newer prescriptions could be limited,” say the researchers.

Will political pressure sway a divided Congress before the upcoming midterm elections to hammer out a bipartisan solution to put the brakes to the nation’s skyrocketing drug costs and to provide more American’s affordable health care through an expanded Medicare program. Its wait and see.