50 Wishes for
Medicare’s Future

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Strengthen Part D

Close the Part D doughnut hole sooner

The Affordable Care Act took a historic step toward making prescription drugs more affordable by closing the Part D prescription drug coverage gap (or doughnut hole). Until 2010, while in the doughnut hole, beneficiaries were responsible for the full cost of needed medications. Over time, this obligation is gradually diminishing, and the doughnut hole will be fully closed by 2020. Congress should close the doughnut hole sooner by increasing discounts expected from pharmaceutical manufacturers. This policy proposal represents a win-win by lowering the cost of prescription drugs for beneficiaries and securing over $16 billion in savings for the Medicare program over 10 years.

Require Part D plans to give the reason for a medication denial at the pharmacy counter

Knowing why a prescription drug is refused at the pharmacy counter is critical to helping beneficiaries determine their next steps—whether it is working with their physician to secure an alternative or appealing for coverage from their Part D plan. The federal government should require Part D plans to provide an individually tailored notice at the pharmacy counter when a medication is refused. The notice should explain why the prescription cannot be filled, for instance because it is off-formulary or because prior authorization is needed.

Require Part D coverage determinations at the pharmacy counter

After being refused a prescribed medication at the pharmacy, a beneficiary must formally request coverage from their Part D plan before the appeals process can even begin. In other words, a beneficiary must ask for a denial that she can then appeal. Being told no at the pharmacy doesn’t count as a formal denial. To ease beneficiary burdens and streamline the appeals process, the federal government should require Part D plans to make some types of coverage determinations at the pharmacy counter—eliminating a needless step in the appeals process for Medicare beneficiaries.

Allow appeals on the Part D specialty tier

When medically necessary, people with Part D have the right to request that their plan allow them to pay less for high-cost medications when a similar, lower-cost medicine is available on their plan’s formulary—this is known as a tiering exception. Unfairly, these same rights are not granted to beneficiaries whose prescription drugs are placed on the plan’s specialty tier, where cost-sharing can be exorbitant. Congress should pass legislation allowing Medicare beneficiaries the right to a tiering exception for specialty tier medications.

Add Part D to an integrated appeals process for Medicare-Medicaid managed care plans

In some states that are testing new care coordination models for dually eligible Medicare and Medicaid beneficiaries, the federal government is allowing the state and health plan to use an integrated appeals process. These innovative appeals models combine the best of the Medicare and Medicaid systems. But, this process is missing a critical element—prescription drug denials and appeals. The federal government should integrate Part D appeals as it continues to test how best to integrate care for those with Medicare and Medicaid coverage.

Create a publicly-administered Part D benefit

The Medicare prescription drug program is operated solely by private health plans. Adding a public drug benefit to the Part D program would diminish confusion among beneficiaries who now must navigate a complicated maze of private health plans and year-to-year formulary changes. In addition to enhancing beneficiary choice, a Medicare-administered plan also has the potential to create federal savings through simplified administrative processes. Congress should create a publicly-administered Part D benefit.

Create Medicare Part E—a public supplement to Original Medicare with Part D benefits and a catastrophic cap

Medicare beneficiaries who opt for the flexibility and simplicity of Original Medicare should be protected from catastrophic costs by an out-of-pocket maximum and should benefit from an integrated Part D benefit. Congress should introduce a public supplement to Medicare—Part Extra or Part E—that wraps together all Medicare benefits, including hospital, outpatient, and prescription drug coverage. Paid for through beneficiary premiums, this benefit would create another choice along with existing private options, including Medicare Advantage and Part D.

Restore Medicare prescription drug rebates

When the Medicare Part D drug benefit was created, the federal government lost important discounts from pharmaceutical makers for prescription drugs made available for low-income beneficiaries. At a minimum, Congress should restore these discounts—lowering drug prices, preserving beneficiary access to needed medications, and saving over $120 billion in the Medicare program over 10 years. Even better, Congress should pass legislation securing discounts on prescription drugs provided to all Medicare beneficiaries.

Allow Medicare to negotiate Part D prices—especially for high-cost, specialty drugs

Unlike state Medicaid programs and the Veteran’s Administration, Medicare is prohibited from negotiating the price of prescription drugs directly with pharmaceutical makers. This prohibition is becoming increasingly problematic as more high-cost specialty medications come onto the market. Lifesaving medications for Hepatitis C—costing $84,000 per treatment and higher—are emblematic of this worrying trend. Congress should allow the Medicare program to negotiate drug prices, especially for high-cost specialty medicines.