Leigh Purvis, director of Health Services Research at AARP Public Policy Institute, discusses future policies that will relieve Medicare beneficiaries from some of their expensive out-of-pocket costs.
What is the impact of a lack of a ceiling on out-of-pocket costs in Medicare?
The lack of a hard-out-of-pocket cap is really difficult for beneficiaries. A lot of them have very low income so when they’re facing these incredibly high costs, a lot of them can walk away from the pharmacy counter and not take the drugs that they need to stay healthy. That doesn’t really exist in a lot of other types of health insurance. The fact that there is no hard-out-of-pocket cap in Medicare Part B, you know you have 20% coinsurance and that can go forever and you do have some people who have costs that exceed $100,000 per year, which is incredible. Then under Medicare Part D, there is technically an out-of-pocket cap but that 5% adds up in catastrophic and you have some beneficiaries that are spending upwards of $10,000 so when you think about the fact that the median income is around $26,000 that obviously is cost prohibitive.
What areas of reform do you see that can help provide relief for Medicare patients from high prescription drug costs?
I think a lot of what we’re looking at right now is trying to address some of the misplaced incentives under the Medicare Part D benefit. Unfortunately, a lot of those changes may not necessarily get to the underlying problem which is the prices of the products that are being covered. We’re very supportive of efforts to help reduce out-of-pocket costs, we wanna make sure people get access to the drugs that they need, but to the extent that the solutions are just shifting costs around, the challenge is that eventually it can make Medicare Part D more expensive from a premium perspective and actually make that type of coverage unaffordable. So, we are definitely interested in solutions that get to the underlying problem which is the prices of the products that are being covered and trying to find a way to bring down prescription drug prices.