Too many seniors with chronic medical conditions are in a financial bind. A recent Kaiser Family Foundation survey found that 20% of Americans over 64 have trouble affording their prescriptions. And with inflation rates now hitting 40-year highs, budgets are even tighter.
Thankfully, help is on the way: A bill before Congress would cap the out-of-pocket cost of insulin to treat diabetes at $35 a month, both for seniors with drug coverage under Medicare and all patients with private health insurance. The cap would apply regardless of deductible limits or co-pay rules. President Biden endorsed the goal in his State of the Union address.
It’s a terrific idea. More than 11% of the U.S. population has diagnosed diabetes, as do nearly 25% of seniors. More than 100,000 Americans died of the disease in 2021. Investing in affordable medication now prevents manageable cases of diabetes from turning into deadly crises in the future.
But why stop with insulin? The same logic applies to medicines that treat other chronic conditions. By making these drugs affordable, seniors can avoid hospital visits that would cost many times more than medication — besides being painful, frightening and risky.
Michael Mandel, chief economist at the Progressive Policy Institute, recently outlined how such a policy would work. He called for capping patient co-pays on drugs that treat the most common chronic conditions, including asthma and heart failure, plus medications that prevent stroke.
As Mandel indicates, such caps would cost the federal government something, although how much depends on how other reforms pan out. But limiting out-of-pocket spending would be well worth the taxpayer cost and probably save federal dollars in the long run. That’s because treating patients with affordable drugs now saves the cost of expensive surgeries and procedures down the road.
Consider, for example, a senior with congestive heart failure. A recent study in the journal PharmacoEconomics put the total median cost of heart failure for patients with Medicare drug coverage at about $24,000 a year. Nearly $16,000 of that total — about 65% — comes from hospitalizations, while drug costs clock in at a maximum of just $1,147.
More broadly, in 2019 — before the pandemic — hospital visits accounted for 31.4% of all health-care spending, and prescription drugs for just 9.7%, according to the American Medical Association. These figures suggest that preventing hospitalization could save a great deal for individual patients — as well as for the health-care system as a whole.
For a long time, Democrats have focused too narrowly on lowering medication list prices — the prices initially set by manufacturers. But the fact is, very few people actually pay a drug’s list price, either because their medication is partially covered by insurance or because of the billions of dollars in annual rebates and discounts that drugmakers provide to insurers, industry middlemen and patients themselves.
In short, only targeting list prices doesn’t effectively help patients. Even expanding insurance coverage, while important, is of limited use if we let insurers push more and more costs onto patients in the form of high deductibles and co-pay fees. Instead, the policy focus should be on what patients pay out of their own pockets at clinics, hospitals, and pharmacies.
That’s where more limits on patient drug spending enter the picture. The $35-a-month insulin cap has passed the House and is headed for the Senate. That’s a good start. But we should look beyond diabetes to other chronic conditions. By making more of these medications affordable, we can save money and lives.
Dean is the former chair of the Democratic National Committee and former governor of Vermont.
Copyright © 2021, New York Daily News
Copyright © 2021, New York Daily News