Smart changes to Medicare

Medicare is better at containing rising health care costs than private insurance, while at the same time delivering quality care. Still, some in Washington continue to demand cuts to Medicare that would be devastating to people who depend on it.

We can bring down the cost of prescription drugs for people with Medicare in a few different ways:

  • Restore Medicare prescription drug rebates that ended when Medicare Part D was created. The Medicare Modernization Act, which created Medicare Part D, severely limited the government’s ability to control the prices it paid for prescription drugs. Reinstating this discount would save an estimated $141.2 billion over 10 years.
  • Allow Medicare to negotiate drug prices for a public Part D option. Both the Veteran’s Administration and Medicaid directly negotiate on prescription drug prices, but Medicare is expressly prohibited from participating in the same negotiations. This proposal has the potential to save up to $20 billion over 10 years.
  • Close the Medicare Part D doughnut hole sooner. The Part D doughnut hole poses significant financial and health risks to people with Medicare. The Affordable Care Act gradually closes this coverage gap, but it should be closed sooner, which would not only make the drugs more affordable, it will save an estimated $16.6 billion over 10 years.
  • Promote cost-effective prescribing for Part B prescription drugs. Medicare Part B covers many drugs that treat cancer, macular degeneration, anemia and arthritis. In general, these drugs are very costly both for the Medicare program and for beneficiaries. The Medicare program could save considerably if policies were in place to encourage the use of less expensive—but equally effective—alternatives to the highest cost drugs.


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