Press Releases
April 8, 2019

National Health Organizations say NO to Medicare Rebate Rule as Seniors Oppose Impact to Part D Premiums

62% of Seniors Oppose Potential Impact to Medicare Part D Premiums, Reduced Benefits

Washington, D.C. —Fifteen national, state, and local organizations representing and providing care for Medicare beneficiaries sent a letter to the Office of Inspector General at the Department of Health and Human Services (HHS) expressing concern about a proposal to eliminate the current drug rebate process in Medicare.

The proposal, if finalized, would remove safe harbor protection for drug manufacturer rebates, which are currently negotiated between pharmacy benefit managers (PBMs) and drug manufacturers, in Medicare Part D.


Medicare Part D has greatly expanded coverage for prescription drugs to millions of Medicare beneficiaries since its inception 13 years ago. Medicare Advantage Part D plans comprise a growing share of overall Part D enrollment as more beneficiaries choose plans with integrated medical and drug benefits. Most Medicare Advantage enrollees (88 percent) are in MA-PD plans and more than 50% live below incomes of $30,000 annually.


The letter states: ‘‘As organizations representing beneficiaries, community-based organizations, providers, retiree systems, and managed care organizations, we oppose the recent proposed rule to eliminate manufacturer rebates in Part D. We believe if implemented, the proposed rule will jeopardize the high-quality, affordable prescription drug coverage provided in Medicare Advantage and may cause unintended consequences to beneficiaries.’’


View full letter signed by the following organizations:


American Physical Therapy Association

Academy of Managed Care Pharmacy

Academy of Nutrition and Diabetes

Better Medicare Alliance

Dental Trade Alliance

Home Care Association of America


National Business Group on Health

National Retail Federation

Ohio Public Employee Retirement System

Public Sector Healthcare Roundtable

School Employees Retirement System of Ohio

SilverSneakers — Tivity Health

SNP Alliance

Teachers’ Retirement System of Kentucky



According to HHS’ analysis, Part D premiums could rise 19 percent in the first year, and 25 percent over the next ten years. However, new independent analysis released by Better Medicare Alliance (BMA) shows that the impact could expose all 16.4 million individuals in Medicare Advantage Part D (MA-PD) plans to higher out-of-pocket costs and reduced supplemental benefits. Additionally, 8.6 million beneficiaries in MA-PD plans who pay premiums could face an increase of $29 in monthly premiums.

The elimination of Part D rebates will reduce MA-PD plans’ funds for financing supplemental benefits. According to independent analysis, MA-PD plans could see an average 28% decrease in rebate funding or a decrease of $228 per person per year.



According to a Morning Consult poll survey of Medicare-eligible seniors, a majority (79 percent) of seniors on Medicare Advantage value their access to supplemental benefits and 82 percent of those on Part D say a $29/month increase in their premium would impact their ability to pay their monthly premium. Fifty-four percent on a Part D plan say they would make lifestyle changes in order to afford a $29/month increase such as cutting other expenses like groceries, gas, etc.


Opposition to the rebate rule among poll respondents increased from 30 percent to 62 percent once knowing the proposed rule could result in higher premiums, higher out-of-pocket costs or reduced supplemental benefits for 16 million people enrolled in Part D.


BMA, the leading advocacy coalition in support of Medicare Advantage, has also galvanized BMA senior advocates to inform them of the consequences of this proposed rule and encourage them to express opposition to the proposed rebate rule. In the past week, nearly 3,000 advocates from BMA’s Keep Our Prescription Drugs Affordable Senior Taskforce, have written letters and signed a petition against the rebate proposal.

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