With Seniors’ Healthcare At Risk, Congress Cannot Strike Midnight Deal

This past Thursday, reports started to emerge that Speaker of the House Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin were getting closer to an agreement on overall government spending. The rumored plan included a two year raise of budget caps and a two-year debt limit increase.

Following the longest government shutdown in United States history which ended in January, it is reassuring that a plan to keep the government open has been discussed prior to an imminent shutdown.

Ultimately, budget fighting and negotiating is still far from over.

President Trump’s administration has indicated that they will be looking for $150 billion in offsets, something that is currently being negotiated.

Secretary Mnuchin assuaged concerns that the offsets could derail the preliminary agreement.

“We’re now working on offsets. We’ve agreed that there will be offsets, so now we’re just trying to figure out whether we can get both the number agreed to in time and the specifics in a structure and we’re all working hard to do that,” Mnuchin said.

Indeed, Senate Minority Leader Chuck Schumer (D-NY) remains optimistic there will be a deal.

“We’re close. I think there’s a desire to come to an agreement from all of us," Schumer said.

Finding a pathway to a deal this early is strategically a good move for President Trump and Congressional Republicans.

Following the record long shutdown that ended in January, a Washington Post-ABC News Poll conducted at the end of the shutdown found that 53% of Americans blamed Trump and Republicans in Congress for the shutdown.

If a deal were not reached to prevent another shutdown, there was a good probability that once again the American people would blame the President and other Republicans for the inability to come to a deal and prevent a shutdown.

Coming to a deal now, especially one that begins to address main funding offsets at this stage, is strategically a smart move for Republicans going in to the 2020 election.

However, the group that may be most impacted by this budget proposal is American seniors.

Within the new budget deal, it is clear that there would be fundamental changes to Medicare Part D, a popular and bipartisan part of our health care system.

The potential proposed plan in the budget would require inflation rebate measures imposed on drug manufacturers by the government which would damage the systems that make Medicare Part D so effective.

Indeed, the market-based system that Medicare Part D has thrived on has successfully kept costs low and ensured that comprehensive coverage is provided for more than 44 million seniors in America, including people with disabilities.

By forcing the drug manufacturers to tie drug prices to inflation, there is the potential to damage the important life-saving research down the pipeline.

To be sure, plans under Part D typically already negotiate price protection rebates which compel manufactures to pay rebates if and when their prices increase above a certain threshold.

Thus, if the government decides to mandate an inflation rebate, where the rebate would go to the government in place of it going to the plans, premiums will certainly increase due to the fact that the current privately negotiated rebates are, as of now, being used to subsidize the premiums.

Simply put, it would be a terrible move by Congress to make such a significant structural change to a program like Medicare Part D buried in a larger spending package.

It is not patient centric, it will lead to increased costs especially for seniors, and will jeopardize other plans in the works like creating an out-of-pocket cap for Part D.

In such contentious and political polarized times, there are few effective bipartisan measures that we can point to, and Medicare Part D is one of them. Congress much not upset the vital and popular system of Part D.

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This past Thursday, reports started to emerge that Speaker of the House Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin were getting closer to an agreement on overall government spending. The rumored plan included a two year raise of budget caps and a two-year debt limit increase.

Following the longest government shutdown in United States history which ended in January, it is reassuring that a plan to keep the government open has been discussed prior to an imminent shutdown.

Ultimately, budget fighting and negotiating is still far from over.

President Trump’s administration has indicated that they will be looking for $150 billion in offsets, something that is currently being negotiated.

Secretary Mnuchin assuaged concerns that the offsets could derail the preliminary agreement.

“We’re now working on offsets. We’ve agreed that there will be offsets, so now we’re just trying to figure out whether we can get both the number agreed to in time and the specifics in a structure and we’re all working hard to do that,” Mnuchin said.

Indeed, Senate Minority Leader Chuck Schumer (D-NY) remains optimistic there will be a deal.

“We’re close. I think there’s a desire to come to an agreement from all of us,” Schumer said.

Finding a pathway to a deal this early is strategically a good move for President Trump and Congressional Republicans.

Following the record long shutdown that ended in January, a Washington Post-ABC News Poll conducted at the end of the shutdown found that 53% of Americans blamed Trump and Republicans in Congress for the shutdown.

If a deal were not reached to prevent another shutdown, there was a good probability that once again the American people would blame the President and other Republicans for the inability to come to a deal and prevent a shutdown.

Coming to a deal now, especially one that begins to address main funding offsets at this stage, is strategically a smart move for Republicans going in to the 2020 election.

However, the group that may be most impacted by this budget proposal is American seniors.

Within the new budget deal, it is clear that there would be fundamental changes to Medicare Part D, a popular and bipartisan part of our health care system.

The potential proposed plan in the budget would require inflation rebate measures imposed on drug manufacturers by the government which would damage the systems that make Medicare Part D so effective.

Indeed, the market-based system that Medicare Part D has thrived on has successfully kept costs low and ensured that comprehensive coverage is provided for more than 44 million seniors in America, including people with disabilities.

By forcing the drug manufacturers to tie drug prices to inflation, there is the potential to damage the important life-saving research down the pipeline.

To be sure, plans under Part D typically already negotiate price protection rebates which compel manufactures to pay rebates if and when their prices increase above a certain threshold.

Thus, if the government decides to mandate an inflation rebate, where the rebate would go to the government in place of it going to the plans, premiums will certainly increase due to the fact that the current privately negotiated rebates are, as of now, being used to subsidize the premiums.

Simply put, it would be a terrible move by Congress to make such a significant structural change to a program like Medicare Part D buried in a larger spending package.

It is not patient centric, it will lead to increased costs especially for seniors, and will jeopardize other plans in the works like creating an out-of-pocket cap for Part D.

In such contentious and political polarized times, there are few effective bipartisan measures that we can point to, and Medicare Part D is one of them. Congress much not upset the vital and popular system of Part D.