Repeal of Obamacare is Back, and Seniors Risk Being the Biggest Losers

April 29, 2017
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By Kenneth E. Thorpe

As Congressional leaders and the White House restart negotiations on the American Health Care Act and look for other ways to curb federal healthcare expenditures, one program critical to America’s seniors stands to lose the most: Medicare Part D, the drug benefit program that has helped seniors live longer and healthier lives.

A new study in the Journal of Health Economics found that Part D reduced senior mortality rates by over 2% annually from 2005-2008, the examined period. That translates to tens of thousands of lives saved each year.

Despite saving lives and money, Medicare Part D is under attack. Currently, private insurers bargain with drug companies for discounts on medicines. President Trump and a number of Congressional Democrats want the government to muscle these insurers aside and negotiate drug prices directly with manufacturers.  Yet, Part D spending per beneficiary is projected to grow just 1.7 percent, roughly half the overall growth in Medicare spending.

Supporters of this government intervention reckon that the government could save billions by lowballing drug companies and refusing to cover medicines it deems too expensive. That approach might help the U.S. Treasury, but it’d leave millions of patients without the advanced medicines they need to stay healthy. The Veterans Administration uses a similar one-size-fits-all model to determine prices. As a result, the VA refuses to cover nearly 20% of the most popular Part D prescription drugs.

Implemented in 2006, Part D helps seniors age 65 and older, as well as those with disabilities, afford prescription medications. Beneficiaries pick the plan they want from private insurers. They pay monthly premiums, which the federal government subsidizes.

The study examined changes in mortality rates for two groups: 66-year-olds who had been eligible for Part D for at least one year and 64-year-olds who were not yet eligible for the program.

They found that Part D plays a crucial role in improving the health of seniors. The 66-year-olds’ mortality rate decreased by more than 2% each year compared to the 64-year-olds’ rate.

Why? By providing seniors with access to affordable medications, Part D helps to boost medical adherence rates. Researchers found that 66-to-75-year-old adults increased their use of cardiovascular medications by up to 30% when enrolled in Part D.

As a result, the cardiovascular mortality rate for 66-year-olds dropped by nearly 4.5%.

Greater access to medicines doesn’t merely save lives — it also lowers healthcare costs. Researchers estimate the improved quality of life, reduced out of pocket expenses, and reduced hospitalizations generate an annual benefit of $20 billion for beneficiaries.

Having affordable access to medication makes a difference in the lives — and deaths — of older Americans. Politicians who support federal price diktats effectively would trade seniors’ health for government savings.

Medicare Part D helps seniors live longer and saves billions annually in healthcare costs. It’s up to our leaders to shore up the program, not spoil it.

Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease.

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