Prices for many prescription drugs have been rising for years. According to a 2021 report from AARP, many of those prices have been rising faster than inflation, and that can be particularly challenging for retirees living on fixed incomes.
Colorado PERA, which offers pre-Medicare and Medicare coverage to public sector benefit recipients and their families, is joining other public plan administrators across the United States in urging Congress to take action and address the rising costs of prescription drugs.
The Public Sector HealthCare Roundtable, a nonprofit, nonpartisan group of which PERA is a member, sent a letter to congressional leadership in mid-March requesting lawmakers support a number of drug pricing recommendations put forth by the Senate Finance Committee.
Those recommendations include:
- Allowing Medicare to negotiate Part B and Part D drug prices: Under current federal law, Medicare is not allowed to negotiate prices directly with drug manufacturers, so the government has to pay whatever price manufacturers set. By allowing direct negotiation, Medicare could secure lower prices for many expensive, name-brand medications.
- Penalizing drug manufacturers when a medication’s price rises faster than inflation: This proposal would require pharmaceutical companies to pay a rebate to Medicare when the price of a drug rises faster than the Consumer Price Index, a widely used measure of inflation.
- Capping out-of-pocket expenses for Part D prescription coverage: There is currently no hard cap on out-of-pocket drug spending in Medicare Part D plans, so retirees can end up spending thousands of dollars a year. This proposal would set the out-of-pocket maximum at $2,000 a year.
PERA Director of Insurance Jessica Linart said prescription drug prices are among the fastest-rising costs associated with health care, and changes are needed to ensure programs like PERACare can continue offering coverage that’s within an affordable range.
“We often hear from PERACare enrollees who say the cost of medication is one of their biggest challenges in retirement,” Linart said. “We’re urging Congress to take up this issue and pass these much-needed reforms as soon as possible.”
Learn more about PERACare coverage here.