Drug Affordability

Most older Americans–make that “most Americans who are paying attention”–know that this country doesn’t have a healthcare system. As a former student put it, we have a healthcare industry. And we pay through the nose for it. A superficial google search will turn up mountains of data confirming the fact that healthcare costs in the United States vastly exceed those of other advanced countries, while giving us a “system” that ranks somewhere between 35th and 37th in the world.

I encountered the data that really made me aware of the insanity of market-driven healtcare several years ago, when I served on a committee organized by a medical-school friend. At the time, seventy percent of all healthcare costs were paid by governments at the local, state and federal levels. Not just Medicare and Medicaid, but through various other programs, and especially through the obligations of government-as-employer of teachers, police and fire personnel, etc. etc.

What really made an impression on me was data showing that those payments by government would be sufficient to pay for all medical care in a national system that eliminated health insurers’ marketing costs, claims processing, overhead and profit. 

I’m a big fan of markets in areas where they work. Healthcare isn’t one of those areas. You don’t go “shopping” or comparing prices when you’re having a heart attack.

The Affordable Care Act was a good first step in delivering healthcare to Americans who’d been priced out of the market. It also gave added freedom to those whose medical issues had locked them into their jobs, thanks our insistence on tying coverage to employment. Drug costs, however, remained far higher than in other countries, thanks to the lobbying clout of “big Pharma,” despite the fact that the federal government is the major funder of research and development.

Reducing those costs is among the many under-appreciated accomplishments of the  Biden Administration. As the Washington Post reported, “Monumental changes to prescription drug prices for seniors are coming.”

Thanks to the Inflation Reduction Act, one of President Biden’s signature achievements, prescription drugs are set to become substantially more affordable for seniors. Yet many Americans seem unaware of just how monumental these changes will be.

The article listed “six things to look for.” The first of those included eye-popping savings for both individual Americans and the government.

For the first time in history, Medicare can now negotiate directly with manufacturers. For the initial round of negotiations, the Centers for Medicare and Medicaid Services chose 10 drugs that treat common health conditions, including cardiovascular disease, cancer and rheumatoid arthritis.
Each of these medications costs consumers in the United States three to eight times what people pay in other countries. In 2022, Medicare paid an eye-popping $46.4 billion for them. The impact to consumers is equally staggering. As CMS Administrator Chiquita Brooks-LaSure told me, “Some of these drugs are thousands of dollars per year for people who depend on them to live.”

It will take some time for negotiated prices to take effect. Assuming the federal government prevails in the lawsuits filed by pharmaceutical companies, CMS expects lower prices to be in place in 2026.
But that’s only the beginning. Fifteen more drugs will be selected for 2027 and then 20 per year from 2029 and thereafter. The lower prices are projected to save the federal government $100 billion over the next several years. Crucially, this means that the negotiations won’t just benefit people who are on these specific medications; the savings are passed along, indirectly, to everyone on Medicare.

Other changes, thanks to the Biden Administration, will include a cap of $2000 per year on out-of-pocket Medicare spending, and significantly lower costs for insulin. Other changes include an income-based subsidy for the most vulnerable Medicare enrollees, making all adult vaccines recommended by the Centers for Disease Control and Prevention free for everyone with Medicare Part D, and requiring drug companies to pay a rebate to Medicare if they increase prices faster than inflation. 

There has been very little media attention to these hard-won changes, presumably because skill at the actual business of governing is less sexy than wall-to-wall coverage of threats to desperate immigrants and hush-money payments to porn stars. 

In her “Letters from an American,” Heather Cox Richardson often compares the autocratic and corrupt self-interest of Trump and the MAGA movement to the Biden Administration’s focus on making life better for average Americans.

Reducing the cost of lifesaving prescription drugs– rather than limiting women’s reproductive liberties and forbidding medical providers to assist trans children– is a perfect example of the wildly different priorities of today’s Democratic Party and the Republican MAGA cult.

In November, vote accordingly.


  1. Does the Inflation Reduction Act do anything about the healthcare industry itself, like regulate the insurance corporations? That is a powerful lobby in government, and is the root of the high cost and low performance. Eliminating those practices would streamline the system, but would also throw many people out of a job.
    As you say many times, it’s complicated.

  2. Off issue but…Today’s news report on the Indiana Primary Election yesterday showed a pitiful voter turnout for the Democrats, dangerously below that of Republicans. Not surprising but it did bring back a memory of my last year living and voting in Florida; in 2000 that infamous “recount” between Gore and Bush outcome came to mind. During the “recount” a locked closet filled with boxes of mail-in ballots, which arrived well before election day, were mysteriously “found” and discounted as not arriving in time. Each time I mail-in my election ballots here I wonder if it will be counted.

    But back to the subject today regarding “Drug Affordability” and Medicare; even with my age (87), disabilities and general health condition, I have only three prescription drugs, which I can pay for. I have no need whatsoever for Medicare Part D coverage so never applied for it. With limited driving ability, I tried to find a doctor nearer my home which meant changing my health care coverage. I began an application via AARP for United Healthcare which included a small premium for Hearing, Vision, Dental and Prescription coverage. I ended the application when notified that I would be charged an additional Late Enrollment Penalty to cover Medicare Part D because I had not applied for it when initially offered. I ended my application and moved on, I thought, then received a letter from my I.U. Health Plans asking why I had cancelled my coverage with them. I had NOT cancelled the coverage and quickly discovered that United Healthcare had cancelled my coverage and listed their name as my current provider. It took weeks to resolve this problem. including direct contact with Medicaid/Medicare and a number of services offered on line for help with health care problems. Finally a letter from I.U. Health Plans informed me my coverage by them had been reinstated and, had I needed any health care during the weeks of seeking help, that they would cover it.

    “Other changes include an income-based subsidy for the most vulnerable Medicare enrollees, making all adult vaccines recommended by the Centers for Disease Control and Prevention free for everyone with Medicare Part D, and requiring drug companies to pay a rebate to Medicare if they increase prices faster than inflation.”

    The above copied and pasted paragraph concerns me regarding future vaccines; I still do not have and do not NEED Medicare Part D coverage for prescription; it would greatly increase my current prescription costs monthly. I am not “needy” enough to be covered by the change but my income is still approximately poverty level and I do not need increases in my drug costs. It sounds as if I would be penalized for paying for my Medicare Parts A, B and C and my medications; leaving coverage for those who do need the Medicare Part D assistance.

  3. JoAnn, my financial guy has told my Medicare eligible wife to stay away from all of those Medicare “Advantage” plans and to stick with the traditional Medicare plans. There are financial traps and severe lifetime limits in those plans that they don’t tell you about in the industry marketing material.

    I’m also frustrated that health insurance doesn’t consider dental health as part of your health coverage. But, because of this exclusion dental billing is much more sane, so I guess I should be careful what I wish for.

  4. The legacy media won’t report about the healthcare changes until it makes it through the courts. No sense covering something until it actually becomes relevant. In case you haven’t been paying attention, Biden loses a lot of court cases in our state and federal courts. It’s as if they are stacked against making any kind of progress.

    Also, the healthcare industry pays exorbitant marketing fees to legacy media. The oligarchic-owned media is part of the healthcare industry. So are many universities across the nation. Universities are part of the socialist system for industry where we socialize the costs (paid for by taxpayers) and then privatize the profits (Big Pharma).

    Just to be clear, both political parties are part of the profit scheme. Both parties receive hefty contributions. Any wins or losses at the federal level are suspect at best. Obamacare was the product of the Koch-funded Heritage Foundation. It did very little and was then cut into pieces by the Republicans.

    As for the primary yesterday, was there any reason for Democrats to head to the polls? I didn’t get a single piece of marketing from the D party because there were no competitive races, including president which has already been chosen.

    Lots can happen between now and November but the trends are not looking good for #GenocideJoe. Donny doesn’t even have to campaign when Joe screws it up one day at a time. Joe’s speech at the Holocaust Remembrance Day was pathetic considering he’s sponsoring and protecting today’s genocide. [rolling eyes]

    November is shaping up to be quite interesting indeed. No matter who wins, neither one will neither one will address our capitalistic healthcare industry. We are screwed for another four years.

  5. I’m sure that we can do a few fairly easy things to control costs. First we start with paperwork. Let’s develop a single form and require all insurance companies to use it. My all time favorite US Surgeon General, J Edward Koop, studied this issue and determined that we could save millions with just this one change.

    JoAnn, Dan’s financial guy is correct. Medicare. Part C is essentially a program for insurance companies to make another ton of money. It is essentially an HMO, which means you only get the care that’s pre-approved by them, regardless of what the doctor thinks you must have.

  6. JoAnn,
    Here is a bit of Medicare clarification that I hope will help you. No one is charged a premium for Medicare Part A ( coverage for hospital inpatient, SNF, hospice and some HHC). If you have regular Medicare, then you probably pay a premium for Part B that covers doctor visits, other outpatient care, and DME. If you don’t have regular Medicare and or Part B, then you probably have a Medicare Advantage Plan that is also known as Medicare C. Those plans typically include some type of dental, vision and drug coverage.

    Based on your comment, you should not worry about anything. The only thing you might want to do is call your doctor or pharmacy and ask if vaccines are free for you since you don’t have a Part D plan. If you’ve already received free vaccines before then that may not even be in question.

    Bottom line: If what you have been doing is working for you, don’t fall for the tricky advertising that insurance companies use to get seniors to sign up for Medicare Advantage coverage (Part C) or something else that sounds wonderful because they’ve discovered they can make a LOT of money off of those plans.

  7. Additional thought about JoAnn’s concern. She mentioned having United Healthcare insurance and that leads me to believe that she already has a Medicare Advantage Plan. JoAnn, if this is the case United should already be providing you with some type of dental, vision and drug coverage.

    I just read the comments from Dan and Peggy and definitely agree with them about Medicare Advantage plans. The largest insurance companies realized what a goldmine Medicare could be and they’ve been raping this government program and the taxpayers since Day 1 by falsifying the medical records of the people they cover. United Healthcare was sued by the federal government for $ billions years ago and I don’t know if that case was ever settled. Other large insurers have been sued for doing the same thing. The way the insurers look at it is this: they can cheat us for billions of dollars each year until the government uncovers the cheating, but the insurance company will drag out the lawsuits over multiple years until the government runs out of money to spend on it.

    Indianapolis based Anthem Insurance saw the massive profits other large companies were making off of Medicare Advantage plans and decided they wanted a piece of that tasty pie too, so they bought a privately owned Medicare Advantage plan company based in Florida back in 2018 and have also grown by buying others since then .

  8. On the other hand;

    I’m a big fan of Medicare Advantage Plans because the benefits, like dental, that are modified every year to keep the monthly cost of the plan near zero are real financial benefits.

    Someday we’ll have our first really expensive year, and we are prepared for that. In the meantime, we are saving hundreds of dollars per month.

    We have been health fortunate, and that is also financially fortunate.

  9. Thank you for your responses to JoAnn. In July, I have to sign up for Medicare and have been trying to understand what I need. I need healthcare for my ears, (I’m going deaf) and my eyes (I have thyroid disease that affects my vision) and I need new teeth (my partial doesn’t fit because I lost teeth and weight). Since I moved to CA, I am also looking for doctors to help me manage my thyroid disease and all of these random things that need to be looked at (moles). JoAnn, I know you can’t just pick up the phone and call Medicare or these health plans so I hope that one of your lovely granddaughters can do this for you.

  10. Whatever Biden has started will be quickly undone in January should the Duck win….

  11. Thanks to all who commented on my message; I am aware of all information you sent. Even at 87, totally deaf, disabled due to severe imbalance with Meniere’s Disease and PPV, spinal problems and moderate COPD, my medical needs are basic and are met by Medicare A, B and C which I know is an HMO. I have dentures so don’t need dental, my inner ear problems are now beyond any help per my former Otology and Neurotology ENT specialist and my annual eye exam and partial cost of eye glasses if needed is covered due to lens implants in 2006. There is no fee for my Part C through I.U. Medicare Select; if I changed I would have to pay a monthly fee for coverages I do not need plus the Late Enrollment Penalty (LEP) for Medicare Part D which I do not need.

    Regarding United Healthcare coverages; for those who were covered by them before Medicare Part D was enacted, there is no LEP if they had Medicare Part D, it is added for those who enrolled in United Healthcare after Medicare Part D was available but they had not previously chosen Medicare part D. It is indeed COMPLICATED; I went through all of this trying to delete the unsolicited United Healthcare and return to my I.U. Health Plan coverage.

    If my health problems change, I will have to find a way to take care of them. But for now, I am a great believer in “If it ain’t broke, don’t fix it.” Thanks again to all!

  12. It is possible to be in favor of what the insurance industry has successfully dubbed “socialist healthcare” without being a socialist, and that is where I find myself. I don’t think merely calling any system socialist or communist or capitalist is any measure of such system’s results, and I see no reason why the non-profit affordability of universal health care should not be borne by all of us, just as the costs of a war, for instance, since both a war and a plague (see covid) can have fatal consequences, and, why should we leave the nation’s health to the denizens of boardrooms of the healthcare industry and its lobbyists concerned primarily with executive compensation, stock buybacks and shareholder dividends, none of which would be debits to our collective health care account if we paid our own bills (which we are paying anyway by the afflicted, and at a great profit to the industry).
    I rest my case.

  13. Todd, it’s not genocide, and calling Biden “Genocide Joe” makes me think you get your information directly from our buddy Vladimir.

    If you want to convince anyone, try making sound arguments and not resorting to Trumpesque name-calling.

  14. JoAnn, your IU Health plan is actually a private insurance Medicare Advantage plan. Medicare Advantage plans are called Part C plans and they take the place of Part A, B and D in regular Medicare. You most likely receive discounted prescriptions through your Medicare Advantage plan. You are correct – if it ain’t broke don’t fix it. If anyone contacts you about something you ‘need’ for Medicare then you probably don’t need it because you are already covered.

  15. AgingLGirl – there is a federal network of state health insurance assistance programs known as SHIP in each state that provides free impartial information to help consumers make decisions regarding health insurance options related to Medicare decisions. Their trained reps are really helpful with narrowing down the best options for your financial and health situation. They can help you every year if your situation changes.

    You should be able to find a rep/agent close to you on California’s government website.

  16. Nancy; I am aware my I.U. Health Plan is my Medicare Supplemental plan. I pay $0 monthly premium, $0 primary care physician visits and I get $0 prescription coverage. I pay a small percentage of radiology and lab fees for tests. My monthly Medicare premium deducted from my Social Security checks is just under $149.

    The I.U. Health Plan, Medicare Supplemental coverage, began as Metro Health Care through my years of employment with the City of Indianapolis; it was the first HMO in Indianapolis. I received the best medical care at reasonable costs from Metro; remained with it through the takeover changes, Senior Smart Choice, Clarian, Clarian/IU, to my current I.U. Health Plan health care.

  17. I’m on a Medicare Advantage plan and it’s worked well for me. It fits my needs and limits my annual out of pocket costs. Three years ago I went through cancer treatment, received very good care and maxed out on out of pocket. I encourage the use of the Medicare website to compare plans. Brokers may have a vested interest in steering you to the plan with the highest sales commissions

  18. Re costs of medications. After a recent successful surgical procedure, I was experiencing a minor after-effect that required some attention. I was provided with 8 weeks of “samples” of a new medication for the after-effect symptoms. I was advised to take them for the duration as prescribed and not to quit even if the cost seemed too much.
    Fortunately, I spoke to my pharmacist before starting the recommended dose. The cost without coverage would have been $1700 a month. With coverage, my cost would be $275 per month. I declined to have the prescription filled and returned the samples to the doctor’s office. I can live with the after-effect. Paying for the medication would force me to decide if I could pay necessary utility and food bills, to say nothing of car/home insurance.
    I don’t know how I feel about what I was instructed to do by the doctor. Do doctors even know the cost to their patients? It is a matter of trust that I have now begun to question.
    It seems that we as citizens should never trust any entity, public or private, to be working with the best interests of its constituents/customers. Always question.

  19. IU healthcare is a behemoth in Indiana. Look at all the building going on at Methodist and around the IU campus downtown. They have fine-tuned their methods to extract as much profit from government funded healthcare insurance and are on the hunt for more. I hate the thought of a clerk at the insurance company telling the Doctors what they can’t do for the patient. We have laws that a certain percentage of premiums (80%?) has to go to patient care. I get the impression those lines are crossed/blurred or somehow hidden/confused in bookkeeping?
    Confusion is also a name of the game and different agents seem to understand in different ways. What are all these “donut holes” in the policies? Such a senior friendly term for more confusion and we won’t pay for where most of your projected expense will be this year. This in itself discourages some seniors from seeking care and conditions that could be helped are ignored and become worse.
    I just read that the Biden administration is going after “junk patents” that pharmaceutical companies use to manipulate higher prices when the real patent has expired. The audacity/greed of these people with no regard for the hardship it puts on patients seems un-American.
    Another down in the gutter method is for hospitals to sell their medical debt, pennies on the dollar to unscrupulous debt collectors. Hospitals are allowing poor sick people to be harassed. This needs to be outlawed!
    Active US military has insurance that covers their care with any doctor and hospital. They take their excellent federal coverage (Tri Star) ? and can go to the private sector for healthcare. If this system was universal, it would keep private healthcare on its toes competing for the federal dollars.
    It’s a sad state when priorities get out of order and profit is more important than the well-being of people.

  20. Thank you Nancy and Rose…I’ve read about that. Great comments today. Much appreciated.

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