Stephanie Kennan
Oct 27, 2021

Stephanie Kennan Details Next Steps for Medicare Expansion, Drug Negotiations in Congress

In an Oct. 22 article for Think Advisor, McGuireWoods Consulting senior vice president, Stephanie Kennan, detailed sign posts to watch for Medicare expansion and drug negotiations as Congress continues to debate the budget reconciliation bill.

Democrats hope to pay for Medicaid and Medicare expansions with savings from drug negotiations; however, allowing the government to negotiate for drug prices has had a difficult history.

“While lowering drug prices is popular with the public, it is unlikely that broad sweeping authority to negotiate for Medicare and private sector will pass. It is more likely that such a provision will be limited,” Kennan noted.

Both the House and Senate are currently debating what drug negotiation provision to include in the final bill. The House proposal, H.R. 3, includes a provision that would allow negotiations for up to 250 Part D drugs and achieves $500 billion in projected savings. However, not all members approve of this provision and have introduced alternate legislation that only allows Medicare to negotiate for Part B drugs for which the exclusivity period has expired and in cases in which there is no competition.

“Limited authority means more limited savings and that will have a ripple effect on what else can be included in the reconciliation package, because so much of the health provisions were reliant on the savings from drug negotiations,” Kennan said.

Medicare and Medicaid expansion are dependent on the savings from drug negotiations and other pricing reforms. The House is currently proposing to add a vision benefit, and hearing and dental benefits in 2023.

“It is clear with a slimmed down drug negotiations provision, there will not be the funds to do both plus an extension of the premium subsidies for middle-income individuals,” Kennan said. “There may be an effort to make a ‘down payment’ toward a Medicare benefit expansion which is popular in polls while trying to do something to address the Medicaid gap. It will all depend on the amount of savings Congress can achieve.”