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The Good, The Bad, And The Ugly Of Nancy Pelosi’s Drug Pricing Proposal

3 27 0
12.09.2019

During the midterm election campaign, Democrats pledged to help lower prescription drug prices. Since regaining the House majority in January, the party has failed to achieve consensus on precise legislation to accomplish that objective.

However, on Monday a summary of proposals by House Speaker Nancy Pelosi (D-CA)—which became public via leaks from lobbyists, of course—provided an initial glimpse of the Democrat leadership’s policy approach. Party leaders claimed the leaked document describes an old legislative draft (they would say that, wouldn’t they?).

Indeed, the summary contains several bracketed numbers (e.g., “the catastrophic out-of-pocket threshold would be set at $[X] in 2022”), suggesting staff continue to finalize details based on Congressional Budget Office cost estimates and other considerations. But the document allows conservatives to analyze the good, the bad, and the ugly of House Democrats’ potential approach.

Among other proposals, the Pelosi proposal would rearrange the current Part D prescription drug benefit, and “realign incentives to encourage more efficient management of drug spending.” Under current law, once beneficiaries pass through the Part D “doughnut hole” and into the Medicare catastrophic benefit, the federal government pays for 80 percent of beneficiaries’ costs, insurers pay for 15 percent, and beneficiaries pay for 5 percent.

This existing structure creates two problems. First, beneficiaries’ 5 percent exposure contains no limit, such that seniors with incredibly high drug........

© The Federalist