Better Medicare Alliance: Finalization of Rebate Rule Will Harm Medicare Beneficiaries

Washington, D.C. – Better Medicare Alliance (BMA), the leading research and advocacy organization supporting Medicare Advantage, in response to the Trump administration’s possible finalization of its flawed “rebate rule” in the coming days. The rule eliminates current cost-saving prescription drug rebates for seniors in Medicare Part D plans, including the more than 22 million beneficiaries enrolled in Medicare Advantage-Prescription Drug (MA-PD) plans.

Preparation to release the final rule comes after the Trump administration’s own actuaries found that such policies could raise Medicare Part D premiums by 19% in the first year and 25% in the decade thereafter. The administration also provided several cost estimates for the rule’s impact on federal costs which ranged from saving nearly $100 billion to costing nearly $200 billion.

Likewise, a 2019 analysis from Avalere Health found that eliminating prescription drug rebates would “have the consequence of increasing beneficiary premiums and reducing benefit offerings by Medicare Advantage-Prescription Drug (MA-PD) plans.” Medicare Advantage plans with $0 premiums, for example, would see a 28% decrease in the funds available to provide supplemental benefits to enrollees.

“It would be deeply unfortunate to see CMS risk undermining its own progress in lowering health care costs for seniors in the final weeks of the current administration with finalization of this ill-conceived rule,” said Allyson Y. Schwartz, President and CEO of the Better Medicare Alliance. “CMS has touted its work to keep Part D premiums low, yet its own actuaries say this rule could raise Part D premiums by 19% in the first year alone – adding a senseless cost burden on seniors at the height of the COVID-19 pandemic.”

Schwartz continued, “Better Medicare Alliance’s grassroots beneficiary advocates sent more than 10,000 letters to the administration and Congress on the rebate rule in 2020. Clearly, our work is far from over. Together, we will engage lawmakers and the incoming administration to move on meaningful drug affordability solutions that decrease rather than increase costs for seniors.”

Further Reading

• Op-Ed from BMA President and CEO Allyson Y. Schwartz, “Rebate Rule 2.0’ Rejects New Ideas to Lower Drug Costs in Favor of Failed Reruns” – August 18, 2020
• Letter: Better Medicare Alliance leads more than 20 Ally organizations in urging HHS to halt finalization of proposed rebate rule  – August 28, 2020
• Fact Sheet: Elimination of Current Manufacturer Rebates in Part D will Harm Medicare Beneficiaries

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