Administration Unable to Assure Proposed Medicare Part D Rule Will Not Lead to More #BrokenPromises for Nation’s Seniors

February 26, 2014

Legality of Administration’s Proposal to Fundamentally Change Popular Prescription Drug Program Remains In Question

WASHINGTON, DC – The House Energy and Commerce Committee Health Subcommittee today expressed concerns about the legality, consequences, and cost of the Centers for Medicare and Medicaid Services’ proposed changes to the popular Medicare Part D prescription drug program. The administration’s proposed rule guts the competitive nature of the Part D program that has given seniors quality and affordable prescription drug coverage choices. The Medicare Part D program remains a popular and successful model, but the proposed rule threatens to impose changes to the program that would deliver more broken health care promises, including fewer choices for seniors and higher costs for both seniors and taxpayers. 

Health Subcommittee Chairman Joe Pitts (R-PA) explained, “I am at a loss to understand why CMS has proposed these changes and what problems with the Part D drug benefit it is attempting to solve.” Full committee Chairman Fred Upton (R-MI) added, “This sudden proposed disruption to a program that has been functioning so well raises questions about whether CMS can be trusted to exercise the restraint needed to properly oversee modern market-oriented health care programs. Medicare Part D should be looked at as a model. We should build upon the successes of Part D as a benefit that meets the needs of enrollees and keeps costs under control, rather than trying to undercut what it has been able to achieve.”

American Action Forum President Douglas Holtz-Eakin explained, “The success of the program is not an accident; Part D is designed to provide seniors with affordable choices. Competitive bidding and plan selection have led to high-quality products, as measured through member satisfaction rates. … The proposed rule damages the policy foundations of the Medicare Part D program, creating major changes to the program’s operations. CMS should not be able to radically rework a successful program that impacts so many individuals on a whim.” 

Carl Schmid, Deputy Executive Director of The AIDS Institute added, “For the past 10 years, Medicare Part D had been working for millions of seniors and people with disabilities, including over 100,000 people with HIV.”

Responding to questioning from full committee Vice Chairman Marsha Blackburn (R-TN), Principal Deputy Administrator at the Centers for Medicare and Medicaid Services Jonathan Blum argued that the proposal to offer fewer choices was actually a positive change for seniors, calling it simplification. Holtz-Eakin later explained, however, that “For [CMS] to step in and interfere undercuts that competition.” The competitive model has been responsible for keeping down costs and improving the quality of the options for seniors to choose from.

Blum also failed to provide members with a legal justification for the administration’s proposed changes, specifically those to the noninterference clause, saying he would provide CMS’ legal interpretation as well as a full cost-benefit analysis defending the proposed rule to the committee at a later date.

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