The Trump administration is taking steps that could delay premium spikes on Medicare prescription drug beneficiaries until after President Trump’s 2020 reelection bid.
The moves could alleviate a looming problem for Trump in key states. Individual premiums for Medicare prescription drug insurance could jump 19 percent next year under Trump’s plan to purge Medicare of the rebates that drug manufacturers pay to firms that manage pharmacy insurance.
The monthly cost to individual seniors could rise by about $6, according to government estimates.
It is not a large amount but would not go unnoticed by seniors on fixed incomes.
It would also give Democrats an opening to slam Trump as insensitive to the elderly in places like Florida, Pennsylvania, Ohio and Wisconsin — states that Trump must win to regain the White House.
The administration, citing the long lead times required to put the plan into place, took initial steps that could avoid the potential land mine.
It indicated that stripping drug rebates out of the Medicare system will be disruptive and could take a year or more to put into place.
It said it will conduct a “demonstration’’ to “test an efficient transition’’ in 2020 and 2021, providing time to figure out the logistics.
Seema Verma, the administrator of the agency that manages Medicare, also advised pharmacy insurance companies to submit bids to provide Medicare drug coverage in 2020 under the old rebate rules.
The new rule prohibiting the rebates is still under review and is not expected to be finalized before bids are due in eight weeks, on June 3.
“This is a huge program. To turn it on its head, without Medicare and Medicaid being able to say this is how we want to move this forward, is a real challenge,’’ said Tara E. Dwyer, a regulatory lawyer at the firm Mintz.
The potential for a delay arose Friday, ahead of a hearing Tuesday in the Senate Finance Committee, where executives from the prescription drug insurance industry warned of the financial impacts of wiping out rebates.
The executives argued that premiums will jump for all seniors.
They offered similar arguments in public comments Monday on Trump’s rebate rule.
“It will increase premiums for seniors, but do nothing to force drug manufacturers to lower prices,’’ CVS Health said in its comment letter. CVS Health is the umbrella organization of CVS pharmacies, the insurance giant Aetna, and CVS Caremark, its “pharmacy benefit manager’’ division, or PBM. CVS said it was not realistic to remove rebates by 2020, and maybe not even by 2022.
The insurance industry’s trade group, America’s Health Insurance Plans, said the amount of premium increase would depend on how much of the rebate money drug manufacturers retain as a windfall.
If drug companies keep 50 percent of the rebates and fail to fully lower prices to reflect the end of rebates, premiums on seniors would rise 40 percent, AHIP said.