Medicare Drug Prices Would Drastically Change Under New Plan

If President Joe Biden’s new budget is approved, beneficiaries could see significantly lower costs on Medicare Part D prescriptions.

In the $7.3 trillion budget proposal unveiled this week, Biden’s administration asked for Medicare drug plans to keep co-pay prices for anti-cholesterol drugs, blood pressure medications and other high-cost drugs at $2 or below.

If the new rules are passed, drug costs will be lower starting October 1, when the fiscal year 2025 budget goes into effect.

For many seniors at the poverty level, the price caps could help them afford groceries and rent while taking necessary medications.

Altogether, Medicare is likely to cost $839 billion this year, but as more baby boomers enter retirement, that amount could surge to $1.7 trillion by 2034, according to Think Advisor.

Roughly 4.1 million Americans will turn 65 this year and every year through 2027, an Alliance for Lifetime Income report found, which means even more seniors starting Medicare coverage.

Under Biden’s budget, he also asks for more Medicare nutrition and obesity counseling and additional cancer care quality evaluation metrics.

With Medicaid, the budget would see an extra $150 billion spent on home care programs, adult daycare and other community services from 2025 to 2034.

Costs today for necessary anti-cholesterol or blood pressure medications can cut deep into a senior’s budget. According to the National Council on Aging, about 25 million Americans over age 60 are living at or below 250 percent of the federal poverty line.

“High out-of-pocket costs can be difficult for people to afford, especially seniors and people with disabilities,” Monica Fawzy Bryant, chief operating officer of Triage Cancer, previously told Newsweek. “Over the years, we have heard countless stories of people going without their medications, skipping doses or losing their homes because of the high cost of drugs and lack of out-of-pocket maximum in Medicare prescription drug coverage.”

While many seniors will be initially excited to hear about what the budget proposes, Chris Westfall, the founder of the Senior Savings Network, said government regulations on insurance companies often have ripple effects on consumers that usually are not apparent until after the mandate is implemented.

After the passage of the Inflation Reduction Act, for instance, seniors will see lower maximum out-of-pocket costs on prescription drugs beginning in 2025. That means the insulin product NovoLog FlexPen would be as low as $30.

But not everyone thinks the price cuts are for the best. Many Part D carriers and Medicare Advantage plans are “scrambling to figure out how to stay profitable and pass costs to consumers in new ways,” Westfall said.

The budget will need to be passed by the House and Senate, which means Republican pressure will likely see many aspects of the budget change before it takes its final form.

“While pandering to the senior demographic is genius in an election year, the consequence of consumer friendly, anti-business legislation like this will help some and hurt many more,” Westfall told Newsweek. “It is not revenue neutral to the for-profit companies that provide the benefits like a cap on consumer costs on the co-pay or annual level.”