Why drug costs for older Americans should be capped in pandemic’s wake

The coronavirus pandemic has laid bare cracks in our health care system. Among the most acute is the physical and financial vulnerability of older Americans on fixed incomes.

Even before the pandemic one in five adults age 60 and older reported that they were struggling to pay for prescription drugs—and, of those who have at least one chronic condition, nearly one in four report they have stopped taking a prescription medication because of the cost. Not taking prescription medications can have life-threatening consequences for people who suffer from chronic health conditions like heart disease or diabetes.

Pile on a pandemic to these ongoing, unaddressed issues for high-risk older adults, and the cost burden becomes too much to bear. Although Medicare and Medicare Advantage cover the services that patients need if they are infected with COVID-19, in most cases, patients are still responsible for out-of-pocket costs like deductibles and co-pays associated with these services. And the Part D program does not have a limit on out-of-pocket expenses, hampering access for many of those most in need of treatment.

The impact on the health of older adults demands a more courageous policy response – and time is of the essence.

The totality of out-of-pocket costs for prescription medications can be insurmountable for older adults who have multiple and life-threatening diseases, especially for low-income Medicare beneficiaries who do not qualify for the Part D Extra Help program. Not filling, delaying, or curtailing the use of prescription medications can have life-threatening consequences.

Congress must once and for all fix the problem in the next relief package by enacting an annual out-of-pocket cap that would apply to all Part D drugs and a mechanism to “smooth” out costs throughout the benefit year.

The Trump administration’s recent effort to lower insulin costs in Medicare through the Part D Senior Savings Model was a major step forward for the estimated 3.3 million Medicare beneficiaries with diabetes who use at least one of the common forms of insulin. Many of these beneficiaries will see their monthly out-of-pocket insulin costs stabilize to $35 per month starting in January 2021.

Although this is a positive step, Congress must fix the problem more systemically by enacting an annual out-of-pocket cost cap that would apply to all Part D drugs – not just insulin.

In addition, a “smoothing” mechanism should be adopted to help Medicare Part D beneficiaries spread out high upfront costs throughout the benefit year. Right now, those costs hit all at once, which can be a crippling financial burden to older adults on fixed incomes. The cost of one medication or the combined cost of multiple medications can cause a beneficiary to reach their cap very quickly—often in January or February.

CMS proposed a voluntary smoothing solution to private health insurers that would have made critical medications more affordable by allowing the total annual out-of-pocket costs for Medicare Part D beneficiaries to be distributed more evenly throughout a benefit year. Despite widespread support from the patient advocacy community, uptake by insurance companies is expected to be low. We need Congress to step in and mandate a change.

Before the pandemic, Congress and the administration were in heated negotiations on drug pricing that included an annual Part D cap that would also eliminate out-of-pocket costs in the catastrophic phase of the benefit. Rep. Anna Eshoo (D-Calif.) and Sens. Bill Cassidy (R-La.) and Bob Menendez (D-N.J.) led those efforts. We need these solutions now more than ever and they should be included in the next relief package.

There are more than 47 million beneficiaries enrolled in the Medicare Part D program. The inability to pay for out-of-pocket costs can often mean the difference between health and sickness and, life and death, and there have already been too many deaths in recent months.

Given how the pandemic has targeted and ravaged older Americans, capping out-of-pocket costs and smoothing when the bills come due is not just the right thing to do but a critical need that cannot wait.

Susan Peschin, MHS, is president and CEO of Alliance for Aging Research.