Biden's health care policy will change Medicare in 2 big ways
Joe Biden's biggest goal for Medicare is to contain high drug prices and make the state health program available to more elderly Americans.
"The Biden Plan reduces drug companies' influence on providers by stabilizing prices, promoting the best treatments for Americans," said Justin Beck, CEO of Contakt World, a healthcare technology company, "not necessarily the treatments that drug companies make the most profits . " aggressively market the recipes to vendors. "
Biden's proposals come when two-thirds of Americans said their prescription drug prices have increased since 2017, according to a recent Gallup poll, and drug prices have increased 33% since 2014, according to a study by GoodRx.
"The last thing you need to do when you retire is to pull the carpet out of under you by increasing the price of a drug that will keep you alive by 500%," said Codi Blumenfeld-Gantz, Chapter CEO, an independent Medicare advisor.
Here's what Biden would do when Congress passes its Medicare plans.
WILMINGTON, DE - NOVEMBER 16: President-elect Joe Biden makes a remark on the economic recovery at the Queen's in Wilmington, Delaware on Monday, November 16, 2020. (Photo by Salwan Georges / The Washington Post via Getty Images)
Lowering drug prices
In his plan for older Americans, Biden intends to repeal a law responsible for banning the Department of Health and Human Services from negotiating lower drug prices with drug companies.
Medicare is already negotiating prices with hospitals and other health care providers, the campaign said. Given the large number of Americans covered by the program, the government would have an opportunity to obtain lower prices.
"The outrageous price increases of both specialty drugs and widespread necessities such as insulin will continue if we don't make such intelligent rules," said Blumenfeld-Gantz. "It is time Americans were given such protection."
Maximum prices for new drugs
The cheerleading dancers from Sun City Poms rehearse on January 7, 2013 in Sun City, Arizona. (REUTERS / Lucy Nicholson)
To ensure that prices remain reasonable, Biden wants to allow the Minister of Health and Human Services to set up an independent review panel to assess the value of specialized biotech drugs that are not exposed to competition.
The Board would recommend a reasonable price for the drug based on drug pricing in other countries through a process called external reference pricing. If the drug is not available elsewhere, the board will independently review and recommend a price. Private plans that participate in the market also receive a similar tariff.
Link prices to inflation
Biden's plan is also to limit the price increase for all branded, biotech and generic drugs at abusive prices to inflation. These companies would exceed inflation if Biden's plan were to impose a tax penalty on rising prices.
"Economically, the Biden plan will make Medicare more sustainable so that its annual cost increases better reflect inflation," said Beck, "while costs are rising as an overwhelming percentage of GDP on the current path in the US."
Allow Americans to Shop Abroad
Medicare currently counts more than 60 million Americans, including retirees and people with disabilities. (Source: Getty Creative)
Americans could also buy prescription drugs from other countries under Biden's plan, which would create more competition for US drug companies to incentivize keeping prices down. The only criterion is that the US Department of Health must confirm that these drugs are safe.
Improving the supply of generic drugs
Non-branded drugs, also called generics, would also get a boost. Biden's plan would aim to improve the availability of safer generics to reduce health care costs. He plans to remove roadblocks that make generic versions of drugs to market faster and make it easier for generic manufacturers to get samples of branded drugs.
Lower eligibility age
Medicare currently counts more than 60 million Americans, including retirees and people with disabilities. Biden wants to increase those numbers by lowering the Medicare registration age from 65 to 60.
"Many of these people would no longer be restricted by their employer-provided coverage," said Blumenfeld-Gantz. "This, in turn, could facilitate earlier retirement and lower health premiums for younger employees if older employees choose Medicare instead of employer-sponsored coverage."
According to Avalere Health, a consulting firm, the move would also bring up to 23 million people to Medicare.
"We've let the rest of the world jump in front of us when it comes to making sure we get both effectiveness and value for our money in [healthcare]," Beck said. "It's time America entered the 21st century with this."
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Dhara is a reporter for Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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