This essay is an independent contribution by Caroline Morehouse, 2022 Somers Research Intern on Long-Term Care and Aging. Opinions within are not expressly endorsed by the National Academy of Social Insurance. Please feel free to share your thoughts in the comment section below or reach out to Ariella Jailal, Program Coordinator, at email@example.com with feedback.
When I was halfway through my internship with the National Academy of Social Insurance, Joe Manchin decided that he could stomach lowering prescription drug prices for older adults. But his 50th Senate vote could not support a child tax credit, paid family leave, or universal community college.
The Senator from West Virginia initially edited and ultimately shredded the Democrats’ Build Back Better agenda, reducing a transformational investment in our social insurance system down to a targeted adjustment to the Medicare prescription drug program. However, for SCAN Health Plan, the not-for-profit Medicare Advantage plan where I interned, this proposal is not just a minor modification to Medicare but a promise to lower drug prices for our thousands of members. As a SCAN intern, prescription drug reform is not just a timely policy project but a lesson in the political salience of high drug prices and the political sway of older Americans. Finally, for the Medicare program, this bill is not just an expansion of prescription drug access but an opportunity to consider future policies that ensure quality care for older adults.
Prescription Drugs in the United States: Rising Costs and Coverage
The political momentum behind prescription drug price reform comes after decades of skyrocketing drug prices in the United States, and there is no better case study than insulin. Insulin prices rose by 300 percent between 2002 and 2013, as “the big three” insulin manufacturers increased prices in lockstep. The millions of patients who rely on insulin on a daily basis are paying higher out-of-pocket costs while suffering worse health outcomes: One in four Americans with diabetes reports rationing insulin.
Overall, despite the increasing availability of generic drugs, brand-name drug prices continue to rise exponentially. A 2022 Congressional Budget Office report found that Medicare spending on brand-name drugs more than doubled from 2009 to 2018, driven by a combination of escalating launch prices and annual price increases that exceed inflation. Once again, the burden ultimately falls on the individual. A 2018 Kaiser Family Foundation poll showed that 26 percent of Americans worry about affording their prescriptions.
On the other hand, the U.S. has made progress in recent years in expanding prescription drug coverage. For instance, the establishment of Medicare Part D in 2006 enabled the program to insure prescription drugs for the first time, covering prescriptions for nearly 50 million Americans as of 2020. Congress designed this new component of Medicare as a public-private partnership, in which Medicare beneficiaries enroll in commercial Prescription Drug Plans (PDPs) or Medicare Advantage Prescription Drug Plans (MA-PDPs) that receive annual payments from the federal Medicare program. Critically, Medicare Part D’s current structure authorizes commercial plans to negotiate their own drug prices and prohibits the federal government from influencing these negotiations.
Despite this expansion, major coverage gaps persist. The program does not cap out-of-pocket costs for non-subsidized enrollees, so patients with high prescription spending must cover five percent of their drug costs beyond $6,550. More broadly, the public-private structure has failed to deliver on savings for the Medicare program. Ongoing increases in spending on brand-name drugs demonstrate that commercial PDPs have not negotiated lower drug prices or eliminated wasteful spending. This failure has spurred growing Congressional interest in allowing the federal government to negotiate prices for certain high-cost drugs, including Senator Manchin’s July 2022 decision to allow one such proposal to become the centerpiece of the Democratic healthcare agenda.
The Bill: Narrow in Scope, Far-reaching for Older Adults
The Senate’s slimmed-down bill allows the Health and Human Services Secretary to negotiate prices for up to ten of the most expensive Medicare-insured drugs by 2026 and 20 drugs by 2029. The bill also reigns in drug prices by requiring manufacturers that raise prices above inflation rates to pay a rebate to the federal government. The Congressional Budget Office estimates that the reductions in drug spending will decrease the federal deficit by $303 billion over a decade.
This legislation also remedies other shortcomings in Part D coverage. It establishes an out-of-pocket spending limit of $2,000, protecting beneficiaries with high drug costs. The bill also increases the uptake of vital adult immunizations by eliminating cost-sharing for covered vaccines. Finally, the bill expands eligibility for Part D subsidies to people with incomes of up to 150 percent of the FPL.
Prescription Drugs for Older Adults: It’s More Complicated than Costs
Senator Manchin not only whittled down the number of social insurance policies included in the Build Back Better proposal but also limited the population that stands to benefit. Most Medicare beneficiaries are over the age of 65, so any decreases in prescription drug prices will mostly impact older adults. The bill’s narrow scope forces policymakers to explore options to decrease drug prices across the board. However, as an aspiring caregiver and innovator in geriatric medicine, I see this policy as an opportunity to discuss the distinct challenges that older adults face in accessing and managing prescriptions.
Ninety percent of adults aged 65 and older take at least one prescription drug, with the average older adult taking four or more prescriptions every day. Rising prescription drug use is tied to higher rates of chronic conditions in our aging population. At the same time, most seniors depend on fixed incomes from Social Security. Older adults who take four or more prescriptions or earn less than $30,000 per year are at higher risk of not being able to afford their prescriptions. According to a Kaiser Family Foundation study, roughly one in four older adults report difficulty affording their prescription drugs, and one in five cut costs by not taking their medicines as prescribed. Reforms that limit out-of-pocket spending and expand low-income subsidies would thus increase prescription drug access and adherence for these high-risk groups.
However, the unique complexities of geriatric care mean that lowering prescription drug prices is not enough to comprehensively address medication issues among older adults, who are also vulnerable to taking too many prescriptions. In particular, elderly patients with several providers and multiple chronic conditions often take upwards of five to seven prescriptions. This “polypharmacy” makes it harder for older adults to adhere to their drug regimens and increases the likelihood of toxic drug interactions. Adverse drug events account for ten percent of emergency department visits by Medicare beneficiaries. Polypharmacy calls for policies that address care integration and coordination for older adults.
My work at SCAN Health Plan also illustrates the impacts of the social determinants of health and health equity on medication adherence. In 2020, SCAN reported that Black and Hispanic members take their prescribed medications at lower rates than White members. SCAN requires no copayment for 90 percent of medications, so high out-of-pocket costs could not explain these racial and ethnic disparities. Rather, the organization found the adherence gaps stemmed from distrust in doctors, language barriers, and different philosophies toward conventional medicine. Training SCAN’s workforce to address the needs of these historically marginalized groups reduced adherence disparities by 35 percent.
In the final words of her 1980 article, “Rethinking Health Policy for the Elderly: A Six-Point Program,” Anne Ramsay Somers writes that, unless we reimagine healthcare systems for older adults, “we inevitably will reach a point of having to choose between the interests of the elderly and those of society.” On the one hand, in light of the Democrats’ original Build Back Better proposal, we can frame this slimmed-down bill as an expansion of drug coverage for older adults at the expense of other advances in social insurance.
On the other hand, Somers’ lifetime contributions to the aging field subverted this dichotomy between the interests of older adults and the rest of society. In the same article, Somers calls for changes that would increase preventive medicine; improve care coordination; and address geographic, racial, and ethnic disparities in healthcare–policies that would have unique significance for older adults, but health benefits for all. Following her lead, I view our older populations as not the exception but the encapsulation of the defining issues in healthcare. Lowering drug prices for older adults sets a precedent of prioritizing affordable medicine, paving the way for broader changes. As a 2022 Somers Intern in Long-term Care and Aging Research, I see the passage of prescription drug reform as progress toward Anne Somers’ vision of a healthcare system that values the lives of older adults and all of us.
Caroline Morehouse is a senior at Oberlin College majoring in neuroscience and Hispanic studies. Working with older adults in assisted living throughout the pandemic nurtured Caroline’s passion for building healthcare systems that help older adults age in place. As the 2022 Somers Research Intern on Long-Term Care and Aging at SCAN HealthPlan, Caroline worked with Brenda Sulick (formerly) Vice President of Public, Government, and Community Affairs, and Ryann Hill, Senior Policy Advisor, to research upcoming reforms in prescription drug pricing and Medicare Part D.