Medicare Beneficiaries Need and Deserve Real Systemic Change to Lower Out-of-Pocket Costs

In late September, President Donald Trump announced that the Centers for Medicare and Medicaid Services would distribute $200 cards to 33 million Medicare beneficiaries over the next several weeks to help them afford their medicines.  

It’s the wrong solution for a serious problem.

For years, America’s Medicare beneficiaries have been urging Congress to lower what they spend out-of-pocket on prescription medications at the pharmacy counter. While there is considerable bipartisan support to lower out-of-pocket costs for Americans on Medicare, there has been neither the will nor the urgency to pass legislation in this Congress.

This initiative would reallocate billions of dollars from the Medicare Trust Fund for a one-time disbursement, destabilizing Medicare without offering real assistance to those who need it most.

Instead, we suggest that a better use of these funds would be to apply them as a down payment to make meaningful systemic changes to the Medicare Part D program that can have long-term impact for its 45 million beneficiaries. 

Reforms to the Medicare Part D program that would result in lower out-of-pocket costs for beneficiaries at the pharmacy counter include:

  1. Placing an annual cap or limit on patient out-of-pocket spending for prescription medications.
  2. Implementing a smoothing mechanism for these costs, so that they are evenly distributed across 12 months instead of burdening patients at the beginning of the year.
  3. Expanding the federal Low-Income Subsidy program so that more Medicare beneficiaries can afford their medications.

While the president’s proposed cards may help defray the cost for some picking up their prescriptions next month, they certainly will not help the 1 million older adults and people with disabilities who spend above the catastrophic benefit level, paying more than $3,200 in annual out-of-pocket costs for their medications. Nor will the cards be sufficient for the millions who pay $1,500 on average within the Medicare Part D coverage gap. And come Jan. 1, the large annual out-of-pocket tab starts again as the prescription drug plan year begins and deductibles reset. 

Those on Medicare who pay thousands of dollars in out-of-pocket costs for prescription medications are living with one or more chronic conditions. Many of them have serious illnesses like cancer, hepatitis C, multiple sclerosis, rheumatoid arthritis and others that require specialty medications with a hefty annual out-of-pocket price tag

These patients rely on the medications their health care providers prescribe to maintain their health and, in some cases, to prolong their lives. With high deductibles and copays, and a prolonged economic downturn, many will end up not filling their prescriptions or forgoing treatment because they can’t afford it unless Congress acts now.

Our Medicare beneficiaries deserve more. And members of Congress and the administration need to do better. An overhaul of the Medicare Part D program is urgently needed now to reduce the amount that seniors and people with disabilities pay at the pharmacy counter. We shouldn’t destabilize Medicare by raiding the trust fund for very little benefit. It’s time for policymakers to stop half measures and take action to make meaningful change for our nation’s aging and disabled. 


Dan Klein has served as the president and CEO of the PAN Foundation since 2014, and previously, he served as senior vice president for the Cystic Fibrosis Services specialty pharmacy at the Cystic Fibrosis Foundation.

Amy Niles, executive vice president, joined the PAN Foundation in 2014, having previously served as chair, Medical Relations and Advocacy for the Together Rx Access program, and the president and CEO of the National Women’s Health Resource Center, now known as Healthy Women. 

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