As if rampant inflation weren’t enough, America’s seniors now face soaring premiums for their Medicare drug coverage. And that’s just one of several ways that new government rules are curtailing access to medicine.
Last month, the Biden administration released its latest draft guidance on how to implement the Inflation Reduction Act (IRA), the source of these woes. But unfortunately, the guidance does little to address, let alone fix, the law’s negative effects on millions of Medicare recipients.
Passed in 2022, the IRA included the biggest-ever overhaul to Medicare’s prescription drug benefit, known as Part D. While the administration beefed up the bill with headline-grabbing provisions that promised to reduce costs for seniors, the destruction of Part D has had the opposite effect.
First, insurers under Part D are already raising premiums in response to the IRA. Monthly charges went up 21 percent between 2023 and 2024, according to the Kaiser Family Foundation. A study by the data company HealthView Services found that the increase was even higher in certain states. Across California, Florida, New York, Pennsylvania, and Texas, the average premium increase imposed by three leading providers ranged from 42 percent to 57 percent.
Another tactic insurers are increasingly turning to post-IRA is so-called “utilization management,” a fancy term for restricting access to drugs. For instance, some insurers are instituting strict prior authorization requirements — which are those frustrating rules that mean doctors can’t just prescribe certain tests or medications because they think they’re the best option for their patients’ health. Instead, doctors first have to check with insurers and be granted permission. Needless to say, this puts additional hurdles between patients and treatment.
But that’s not all. Insurers also save money by steering patients to their preferred treatment option — regardless of whether it’s the doctor’s top recommendation. Only if the first option doesn’t work is the patient allowed to move on to the next step on their formulary. This process, known as “step therapy,” can put patients at risk when timely treatment is critical.
At the same time, insurers are making changes to their formularies, which detail which drugs they cover and at what rates. Many are recategorizing medicines they once fully covered, designating them “non-preferred” or “specialty,” meaning the patient’s out-of-pocket charge will be higher.
Finally, some insurers are leaving the Part D market altogether. Overall, the number of stand-alone Part D prescription drug plans available to seniors has decreased by 11 percent since 2023, to 709. And that figure includes all plans available in all states. The number available in any given state ranges from just 15 to 24. Further attrition is expected.
The situation is even worse for low-income patients who receive a subsidy: the number of plans available to them dropped by 34 percent between last year and this year, to just 126, according to the Kaiser Family Foundation.
Some of us expected the new draft guidance to address these serious flaws. And in fact, the document did acknowledge that such issues are important. But it does nothing to actually fix the problems, even as doctors and patients become seriously concerned about losing access to life-saving medicine. Nor does the guidance do anything to improve transparency surrounding the IRA’s overall drug-pricing policies, as was hoped.
Way back in 2021, before the IRA passed, President Biden said that folks shouldn’t have “to choose between rent and groceries and medication.” Yet nearly two years after the bill became law, as its measures start to take full effect, that’s exactly what more and more people are having to do.
Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.
