By Bob Blancato & Thair Phillips
May 20, 2019 at 5:00 am ET
For most Americans of a certain age, the thought of retirement comes down to a few simple equations. Less work equals more time for fun—more travel, time with family, golf, relaxing.
And to get to that equation, most of us do the math to make sure we’ll have enough money in the bank to enjoy these golden years. We pay into 401ks, social security and spend time with financial planners to be able to live our lives to the fullest.
But what many don’t realize is that the equation for keeping us healthy — and having access to important treatments and medications — fall under a system that still can leave millions of Americans facing ridiculously high and unexpected out-of-pocket costs for their basic medications.
How is this? Contrary to most of the insurance plans they had when they were younger, the prescription drug program for older adults within Medicare — Medicare Part D — doesn’t have a cap on out-of-pocket costs for prescription medicines.
That can translate into thousands of unexpected extra dollars — more for those living with a chronic illness — that older Americans need to come up with from their savings.
Since Medicare Part D was enacted in 2006, it has done well to improve the health of the older adult populations our organizations serve, but it hasn’t been without its problems. The so-called donut hole, which kicked in after members spent a few thousand dollars on medications, left many with large out-of-pocket costs until they hit the “catastrophic” coverage threshold.
Even then, older Americans still were required to pay a small percentage of the overall cost of their medicines. While the donut hole issue has been remedied through legislative changes and the advent of the Affordable Care Act (ACA), older adults are continuing to face significant costs — and the trend looks like they will continue to rise rather than fall.
Due to the ACA’s lowering of costs in the donut hole limit to 10 years, it’s estimated that in 2019-2020, older adults will have to spend an additional $1,200 to reach the out-of-pocket spending cap. For those living on a fixed budget, that could prove to be too much to bear. We already hear stories of patients forced to make tough decisions on which of life’s necessities to prioritize. Medications and insurance costs often take a back seat to food, heat and home repairs. That’s not exactly the modern American retirement dream.
And it could be even worse for those living with a chronic illness. Estimates for treating those types of illnesses are even more devastating, with these Americans facing annual out-of-pocket insurance costs as high as $16,500. What about those living with multiple chronic conditions? How could any of us plan for those sorts of sky-high costs?
As new treatments arrive for chronic and deadly conditions like cancer, autoimmune diseases, and diabetes, we need to figure out a reasonable way to get these treatments to older adults without bankrupting them in the process.
Most Americans agree that this should change. A recent poll found that 76 percent of those asked support capping out-of-pocket costs for prescription medication within Medicare Part D.
We couldn’t agree more. It’s clear that politicians are listening to the need to reduce the cost of what all of us — but especially older Americans — are paying at the pharmacy.
There continues to be the belief that some type of bipartisan agreement can be reached this year on prescription drugs. We believe this out-of-pocket cap needs to be an absolute part of any package.
We need Capitol Hill to continue to fight for seniors so they can manage their medical needs.
We have always been champions of allowing Americans choices, to let them take responsibility for planning their retirement. Capping out-of-pocket costs is one way we can eliminate this uncertainty and allow them to not only effectively plan their retirement, but protect those already in Medicare from the hardest choice of all: food or medicine. This will serve not only the individuals who remain healthy, but the greater need to bring down overall healthcare costs for the country as a whole.
We urge Congress and the Trump administration to make sure older adults can afford the insurance costs that come with life-saving prescription medications as they work on changes to our health care system.
Bob Blancato in the Executive Director of the National Association of Nutrition and Aging Services Programs. Thair Phillips is the President Emeritus of Retire Safe.
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