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Earlier this year, the AARP released a sobering analysis on Medicare Part D drug costs: From the start of the Medicare drug plan sign-up deadline on December 7, 2021, through to the end of January 2022, 75 percent of top brand name drugs increased in price.
Over just one month, most of the brand-name drugs often prescribed to Medicare beneficiaries had risen by 5 percent or more, and in some cases as much as 8 percent. As the median annual income for Medicare beneficiaries falls just under $30,000, these price increases can place a significant burden on many older Americans.
Between July 2021 and July 2022, list prices of more than 1,200 prescription drugs rose faster than inflation – increasing 31.6 percent on average. A month later, in August of this year, the Inflation Reduction Act addressed the crisis introducing several key provisions to improve drug affordability.
With this act signed into law, Medicare will now be able to negotiate directly with manufacturers for the price of certain brand-name Medicare Part B and Part D drugs that don’t have competition.
This legislation was necessary for numerous reasons, but it will not fully and immediately solve the issue of rising drug prices. According to the Kaiser Family Foundation, the number of drugs with negotiated prices available will accumulate incrementally over the next decade, and certain categories of drugs are excluded from the negotiation process. The implementation timeline is so gradual, in fact, that drug price negotiations will not begin until 2026 – ultimately, out-of-pocket spending on prescription drugs will still increase for millions of Medicare beneficiaries.
Steep drug price increases could lead beneficiaries to stop taking necessary medications. Older Americans already pay premiums for their Medicare plans, and they should not be paying more than the amount they agreed upon during plan enrollment.
To make matters worse, many Medicare beneficiaries often have no way of knowing when their prescriptions increase in price, as comprehensive drug pricing information is often hidden in inaccessible or expensive databases. Typically, new out-of-pocket expenses are only disclosed at the pharmacy prescription pick-up station – if a patient finds that the cost is out of their means, they may have to walk away without their prescription in hand.
Hella Health recognizes that the Medicare coverage can be daunting, particularly when it comes to drug price fluctuations. It’s why we created Medicare Angel, a digital autonomous advocate, to closely monitor changes to users’ specific plans and the Medicare market in general.
Medicare Angel notifies users if their drug prices change, if their preferred doctors leave their network, or if there are newly available options that may better suit their evolving needs.
The Center for Medicare Services and other advocacy groups have been pushing Congress to implement necessary reforms that discourage post-Medicare-enrollment drug price increases. At Hella, we support these measures; however, in the meantime, staying on top of drug price fluctuations is the best way to beat the system – and our Medicare Angel makes it simple.
Author Bio: Rafal Walkiewicz is the CEO and founder of Hella Health, the first 100% digital platform built to educate and enroll customers in Medicare plans. Rafal has a track record as a thought leader in the insurance industry. His innovative thinking and expertise in insurtech trends set him apart as a disruptor in a sector where change is long overdue. You can read some interviews here: https://bit.ly/3bMhGhz and https://bit.ly/3vVjzj0
