Medicare beneficiaries would see their Part D prescription drug benefits rise by 5% in 2011—and by 20% in 2019—under provisions found in HR 3200, the House's healthcare reform bill, according to the Congressional Budget Office (CBO). However, beneficiary spending on prescription drugs—apart from those premiums—on average would fall.
Under the House reform proposal, beneficiaries' premiums would rise for two reasons: Phasing out the doughnut hole—the gap between the end of the initial coverage range and the catastrophic threshold—and spending more above the catastrophic threshold. This means prescription drug plans would be responsible for covering more.
Next, under new provisions of the bill, pharmaceutical manufacturers could offset the rebates they would be required to pay for full benefit dual-eligible individuals by charging higher prices for new drugs—particularly breakthrough drugs.
Because enrollees pay for about 25% of the cost of coverage through their premiums, premiums would also be higher. In return for those higher premiums, enrollees' would receive greater protection against incurring high drug costs, CBO said.
HR 3200 proposes several changes to the Medicare Part D program, CBO said, that would impact federal spending and premium costs:
According to CBO's estimate, the provisions could save the federal government as much as $30 billion over the 2010 to 2019 period. CBO did not estimate the impact of each provision separately because their effects are closely connected.