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If the “Build Back Better” Plan Becomes Law, Medicare Could See Some Major Changes – Maybe

When Joe Biden campaigned for President in 2020, he used the slogan “Build Back Better.” Now, that phrase – awkward-sounding to some but music to the ears of others – has been attached to the Build Back Better Act, the $1.7 trillion package of social initiatives that passed the Democrat-controlled House of Representatives last week. The bill faces an uncertain future in the Senate, where Democrats – by no means united on the particulars – hold the thinnest of possible majorities.

But regardless of one’s partisan positions, according to this CNBC analysis by reporter Sarah O’Brien, there’s general consensus that, if the bill becomes law with its current Medicare provisions intact, it will represent some of the biggest changes to the program in decades. The health care of over 63 million Americans, nearly 90 percent of them seniors, could be dramatically expanded. Here’s a synopsis of O’Brien’s CNBC report, which we present as appropriate food for thought, as open enrollment comes to an end in just a few days.

A Stronger Social Safety Net – Part of the Build Back Better Act

“Some significant changes to Medicare could be on their way,” O’Brien writes. “With the House passage of the $1.7 trillion Build Back Better Act on Friday, provisions that would improve Medicare have moved a step closer to becoming law.” However, she reminds us, any celebrating by proponents is decidedly premature. “The Senate must still pass its version and the possibility exists that any final measure agreed upon by both chambers may look different from what’s in play now.”

Another CNBC article from a few weeks back describes the legislation in more detail. That article lists several items on which there is fundamental disagreement, meaning that – whatever form the bill takes when it leaves the Senate – the House will have to take up the revised package once again. But nevertheless, the impact on Medicare could help millions of low-to-middle income Americans save money and receive expanded care.

The Power to Negotiate Drug Prices, Plus an Out-of-Pocket Cap

“If the Medicare provisions remain intact, the federal government would be permitted for the first time to negotiate the price of certain drugs with pharmaceutical companies,” says CNBC. “That move is intended to bring down the cost of some prescription drugs.” Another related provision would cap beneficiaries’ out-of-pocket Part D spending at $2,000 annually beginning in 2024. The law would also set the monthly cost for insulin at $35 compared with an average cost that today can exceed $500.

Giving Medicare the power to negotiate drug prices remains a contentious issue. We found this statement on the website of Kansas Democratic representative Sharice Davids, who favors the new provision. “According to the nonpartisan Congressional Budget Office,” the report states, “people on Medicare, as well as those who have private insurance, could see savings of as much as 55 percent for some medicines if Congress moves to limit the drugmakers’ monopoly.” Davids and her allies quote a 2019 CMS analysis that found that giving Medicare negotiating rights for drugs would save private businesses $43 billion over 10 years.

However, as described in this article on Factcheck.org, the pharmaceutical industry strongly opposes allowing Medicare to negotiate drug prices. Big Pharma is using fear tactics to claim that changing the law would empower government bureaucrats to control access to drugs.

Experts Say Out-of-Pocket Cap Would Have Biggest Impact

Apart from controversy over drug pricing, it’s the cap on costs that experts say will bring the biggest benefit. “The proposal that would probably have the most direct effect on beneficiaries is the cap on [Part D] out-of-pocket spending, particularly for people who take expensive drugs,” Tricia Neuman of the Kaiser Family Foundation told CNBC.

In her article, O’Brien says that some of Medicare’s 63.3 million beneficiaries could save thousands of dollars per year under the new law, because there currently is no cap on out-of-pocket drug spending. She quotes 2019 research from the Kaiser Family Foundation that found that some 1.2 million Medicare enrollees spent more than $2,000 on drugs delivered through Part D. “In any given year, it’s a relatively small number of people who have high drug expenditures, but those who do tend to have serious medical conditions that require very pricey drugs,” Kaiser’s Neuman said. 

Under the Build Back Better legislation, Medicare price negotiations with pharmaceutical companies would start gradually in 2025 with up to 10 drugs that year. That number of drugs would double to 20 by 2028.

New Law Says Yes to Hearing, No to Dental and Vision Coverage

One of the biggest arguments for Medicare Advantage Plans – the inclusion of some coverage of hearing treatment – might vanish or shrink with the new law. “Hearing services also would be covered under Part B (outpatient care coverage) starting in 2023,” writes O’Brien. “This would include hearing rehabilitation and treatment services, as well as hearing aids.”

Unfortunately for many, she adds, “earlier versions of the spending bill included dental and vision coverage but they were scrapped.” The number one reason appears to be cost. This report from the Washington Times explained in late October that President Biden chose to drop dental and vision coverage in the face of opposition from fiscally-conservative Democrats like West Virginia Senator Joe Manchin. “[Manchin], a key swing vote for the White House’s agenda, in particular argued that a costly expansion of Medicare would be improper, given the long-term funding issues already facing the entitlement program,” the article reported.

Here at AgingOptions, we’ll continue tracking this legislation as the debate progresses. Meanwhile, you have just a few more days to choose the best Medicare plan for 2022 before open enrollment closes December 7th. We recommend starting your search with a visit to Medicare’s Plan Finder.  The State Health Insurance Assistance Program (SHIP) is also a good place for objective advice.  The link to find help in Washington State is here.

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(originally reported at www.cnbc.com)

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