“We would like to see a balanced drug pricing bill emerge from the Congress this year,” Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, told AP in a recent interview. He later added that “our industry understands that there is going to be some pain involved in the process.”
Why is the drug industry willing to put up with the so called pain of a cap on Medicare drug costs?
Because by capping the price of drugs for those using Medicare D they are hoping to block controls on drug costs, allowing them a free hand in charging Medicare and everyone else whatever they want.
They are hoping we will stop complaining instead of demanding action.
Medicare spends upward of $200 billion a year on prescription drugs, a category that keeps growing as costly new drugs enter the market. An Alzheimer’s medication approved this past week comes with a price of $56,000 a year, for example, and co-payments could skyrocket for patients who use it.
Some Democrats in Congress want Medicare to have the power to negotiate drug prices.
Bernie Sanders goes further. Sanders wants to negotiate drug prices and use Medicare’s savings to create new benefits for dental, vision and hearing coverage. That would represent an historic expansion of Medicare.
At the top of Attorney General Merrick Garland’s to-do list, as he told lawmakers, is investigating the source of information behind an article by ProPublica exposing the billionaire class living tax free.
“I promise you, it will be at the top of my list,” Garland assured Sen. Susan Collins, R-Maine.
The ProPublica article revealed that in some recent years billionaires such as Amazon CEO Jeff Bezos, Tesla CEO Elon Musk, and businessmen Michael Bloomberg, Carl Icahn and George Soros paid no federal income taxes.
What did you pay those years?
The ProPublica article did not reveal how the journalists obtained the tax records, and the outlet did not respond to a request for comment.
However whistle blowers as a journalistic source is a valuable component of democracy and citizen awareness.
It was ProPublica which several years ago exposed the fact that these same billionaires were not tax audited by the IRS. The IRS spent much more time auditing working peoples’ tax returns.
ProPublica found that you are much more likely to be tax audited if you make $20,000 than if you make $400,000. And millionaires were %80 less likely to be audited now than in 2010.
Bezos, Musk and his class pay nearly nothing in federal taxes and Biden’s administration will prosecute the whistle blowers that get that information to the public.
That’s the number one priority according to the Attorney General.
This week’s news that the FDA will approve a drug that treats Alzheimer’s was controversial.
Many medical experts question whether the FDA was rushed to judgement on a drug that costs $56,000 a year as well as raising questions about it’s usefulness.
Meanwhile shares of Biogen Inc. rocketed to a six-year high in trading Monday, as Wall Street analysts cheered the U.S. Food and Drug Administration’s approval of the biotechnology company’s Alzheimer’s drug.
This is a good time for drug companies and the pharmaceutical industry.
For the average American, it’s hard to be mad when a vaccine was created for COVID in less than a year.
While J&J, Moderna and Phizer vaccines were free to get, they got billions from the government.
What gets cloudy when a vaccine for COVID comes out or a drug for Alzheimer’s is released is the issue of how much profit should a drug company make off of it.
For the elderly like me on Medicare, the issue of drug costs and drug company profits has its unique issues.
In 2021, Medicare Part D enrollees must spend $6,550 out of pocket before they reach the “catastrophic” coverage phase, where they typically still have to pay 5% of a drug’s cost, without limit. For retirees taking pricier drugs, that 5% is often unaffordable. Medicare picks up 80% of the drug cost in the catastrophic phase, while Part D plans pay the remaining 15%, and the drug companies pay nothing. High prices for brand-name specialty drugs mean that a growing number of patients hit catastrophic coverage after filling a single prescription, and Medicare’s spending in the catastrophic phase, which more than quadrupled between 2010 and 2019, is expected to reach $88 billion by 2029, according to a report by Medicare’s trustees.
There is federal legislation being considered, a bill in the House aims to cap out-of-pocket drug costs under Medicare.
The pharmaceutical companies support it and there is bipartisan support for caps on co-pays. Why?
Because capping patient co-pays without also capping drug prices directly through government controls on profits and pricing continues the writing of a blank check to Big Pharma.
I am on Medicare and also have secondary insurance and prescription drug coverage that I pay for. I, personally, have two obscenely expensive prescriptions that are much, much cheaper in other countries. I need them to live.
Yes, I can presently pay for them and feel fortunate to be able to do so, but many, many others I know could not do so.
In the wealthiest country in the history of the world, this scam is outrageous. The system is not broken. The system works perfectly for the oligarchs and corporations who legally bribe the politicians of both parties to write laws that make this scan legal.
The average life expectancy for men in Italy is 80.5 and in Japan is 81.5. (Both countries lost in WWII. Both have totally different forms of government and different diets. Both have forms of universal healthcare.)
In the USA male life expectancy is 76.1. How much suffering due to lack of medical care prior to death is anyone’s guess.
Today’s Americans under 45 have massive numbers of uninsured and underinsured people. Life expectancy charts for them are dismal. Politicians know this.
Corruption as government is bipartisan and deadly.
To show you how this policy would work, let’s use Advair as an example. As a pediatrician, I frequently prescribe this inhaler for my asthmatic patients. Under the Prescription Drug Price Relief Act, the Secretary of the Department of Health and Human Services (HHS) would establish a process to first compare the United States’ excessively priced brand-name drugs with the prices of those same drugs in five wealthy countries: France, Germany, the United Kingdom, Japan, and Canada. In 2015, the median cost—or middle price—for a month’s supply of Advair in these five countries was $46.99. In the good ol’ US of A, which lacks the regulations that other countries use to keep drug prices down, it cost $154.80, and that’s after discounts. This domestic price-gouging by the GlaxoSmithKline corporation is literally making it harder for my young patients to breathe.
Based on this price information, the Prescription Drug Price Relief Act would dictate to GlaxoSmithKline that the maximum price they could charge would be $46.99, the median in the other wealthy countries. If GSK refused to lower the price, then the U.S. government would issue competitive licenses to any company that wanted to produce a generic version of Advair and sell it at or below $46.99.
Vermont Senator Bernie Sanders and Califgornia congress member Ro Khanna have introduced the Prescription Drug Price Relief Act against this year.
The United States pays, by far, the highest drug prices in the world for one reason: we let drug companies get away with murder. In 2019, the United States spent $369.7 billion on prescription drugs, or $1,128 per capita – twice as much per capita as other major industrialized nations.
What do Americans get in return for all this spending? Last year, while the pharmaceutical industry made more than twice as much money in the United States – $514 billion – as in all European countries combined, one in four Americans could not afford their prescription.
That is why Senator Bernie Sanders (I-VT) and Representative Ro Khanna (D-CA) are introducing the Prescription Drug Price Relief Act.
This legislation would require the Secretary of Health and Human Services to make sure that Americans do not pay more for prescription drugs than the median price of the following five countries: Canada, the United Kingdom, France, Germany, and Japan.
If pharmaceutical manufacturers refuse to lower drug prices down to the median price of these five countries, the federal government would be required to approve cheaper generic versions of those drugs, regardless of any patents or market exclusivities that are in place.
According to the Center for Economic and Policy Research, if this legislation were to become law, the prices of most brand name drugs would likely be cut in half.
For example, under this bill (average retail prices for a month supply): • Januvia, for diabetes, which costs $586, could cost $293 • Vimpat, for epilepsy, which costs $1,193, could cost $597 • Pristiq, for depression, which costs $276, could cost $138
• Eliqius, for blood clots, which costs $571, could cost $286 • Spiriva, for chronic obstructive pulmonary disease, which costs $553, could cost $277
This is not a radical idea. According to the European Commission, using international prices as a benchmark in prescription drug price negotiations is “the most commonly applied pricing policy in European countries.” The United States, where Medicare is legally prohibited from negotiating drug prices on behalf of seniors, and where international drug prices are never considered, is an outlier.
The United States is also an outlier as it is the only major country that does not guarantee health care as a right to its people. By significantly cutting total drug prices, and not just copayments, the Prescription Drug Price Relief Act would help the more than 30 million uninsured Americans who must pay cash for their medicines at the pharmacy.
Today, a full 80 percent of Americans say that drug prices are too high. The pharmaceutical industry will continue to rip off American patients as long as it can. The Prescription Drug Price Relief Act puts an end to this highway robbery, and will help save lives and reduce premiums by lowering drug prices.
I’ve posted earlier that federal prosecutors and the FBI are using a grand jury and subpoenas to investigate the Pennsylvania Public School Employees Retirement System’s $3 million in land purchases near Harrisburg, as well as the board’s adoption last year of a figure that falsely exaggerated its investment profits.
The PSERS unit involved in the investments is headed by James H. Grossman Jr. who is paid $485,421 yearly, the most in state government and more than double the governor’s pay. Grossman’s two deputies are each paid $399,611.
PSERS executives have hired three law firms, Morgan Lewis, a Philadelphia firm; Womble Bond Dickinson, based in the United States and the United Kingdom; and Pillsbury, a Washington firm.
Womble is to be paid up to $367,500, its contract says. Contracts for Morgan Lewis and Pillsbury have yet to be made public, though they were hired more than seven weeks ago. Documents do show that the lead attorney from Morgan Lewis charged the fund $1,250 an hour for initial work.
The investigation began under a policy that PSERS will pony up $40 million in total legal bills in any one year for agency staff caught up in one investigation.
That $40 million comes from PSERS member’s retirement savings.
“The PSERS board is diverting millions in retirement funds, set aside and intended to pay retirement benefits, to their preferred lawyers to represent them in what may be adversarial to the intended PSERS beneficiaries,” said Arthur Steinberg, president of AFT Pennsylvania, the union for teachers in Philadelphia, Pittsburgh, and some suburban schools.
“This is a classic case of protection for me — the board — but not for thee — the educators who pay into and benefit from the pension.”
When the Medicare program was enacted in 1965, the goals were very specific: protect people from catastrophic hospitalization costs, and encourage them to seek out primary care.
Life expectancy was shorter than it is today, and policymakers did not focus on things like dental, vision and hearing care. Those seemed like extras.
Yet all three are very important for health and longevity. A study published in the journal Health Affairs last year noted that poor oral health limits a person’s ability to eat and speak, and that it is associated with higher rates of diabetes, cardiovascular disease and pulmonary infections. Vision loss is associated with higher risk of falls, depression and cognitive impairment and cognitive impairment. Hearing loss has been associated with dementia, falls and depression and higher rates of hospitalization.
The unmet need for care in the Medicare population is high. Federal data shows that 19 percent of older adults have untreated tooth decay and another 19 percent have complete tooth loss; vision loss affects 37 million people aged 50 or older, and two-thirds of adults age 70 and older have hearing loss.
Two thirds of all people on Medicare don’t have dental coverage, according to the Kaiser Family Foundation. Traditional Medicare will pay for dental care only in very limited circumstances – it must be deemed necessary as part of a covered procedure, for example a tooth extraction needed in preparation for radiation treatment. Likewise, the program does not cover hearing aids or exams, or most vision care.
Medicare Advantage plans have added dental, vision and hearing over the years, and most plans today have some level of coverage. But it tends to be skimpy, especially where dental is concerned. Most Advantage plans cap annual payments for care somewhere between $500 and $2,000 – and that won’t get you very far if you incur a major expense. It’s also possible to buy a commercial policy from outfits such as Delta Dental – but again, the coverage isn’t very robust. A typical PPO offering for retirees comes with a monthly premium around $30, but a cap on annual outlays around $1,500.
If your dental health is good, going “bare” on insurance might not be a big problem – you probably can get away with spending $500 out of pocket in any given year on preventive care like exams and cleanings. The trouble comes if you need expensive periodontal care, implants, crowns or fillings. Those procedures can easily generate a bill of $5,000 or more.
I recently asked the American Dental Association (ADA) for data from its annual survey of dental costs describing the costs in three different hypothetical care scenarios, which were created by the Kaiser Family Foundation. The median annual costs reflect prices reported by dentists for the needed care across the nation in 2020:
Linda, age 67, is in excellent health and visits her dentist regularly. In a typical year, such as last year, Linda has one dental visit with an oral exam, cleaning, and x-rays, and a follow-up exam and cleaning six months later. Median annual cost: $367
James, age 72, went to the dentist after realizing he hadn’t had an oral exam in close to two years. After what he hoped would be a routine check-up and cleaning, his dentist said he would need periodontal treatment, three fillings, and two crowns due to degradation of restorations. After receiving these restorative services, he returned six months later for a regular check-up where he received periodontal maintenance. Median annual cost: $4,358
Dorothy, age 80, has diabetes, heart disease, and arthritis, and takes multiple medications to manage her medical conditions, some of which cause dry mouth. Because she was more focused on her other health problems, she had not been to a dentist in three years. Last year, she went to see a dentist at the suggestion of her physician after she complained of a dull throbbing pain in her lower left jaw. After a comprehensive exam and x-rays, her dentist told her that she needed a root canal and crown, and would need to have four upper teeth extracted. Her dentist recommended two implants to replace the extracted teeth, but when she heard what that would cost, she opted instead for a partial upper denture. Median annual cost: $4,831
Two -thirds of all people on Medicare don’t have dental coverage, according to Kaiser. Among all Medicare beneficiaries who used any dental services, average out-of-pocket spending on dental care was $874 in 2018 and one-fifth spent more than $1,000 out-of-pocket.
Medicare advocates have been calling on Congress to plug these gaps in the program for years, and the idea seems to be gaining momentum. Most recently, President Biden proposed adding dental, vision and hearing care to Medicare (along with reducing the eligibility age to 60) as part of his proposed federal budget.
I focus here mostly on dental care because it has the greatest risk of very high cost. For now, there really are only three viable options for insuring yourself against these risks.
Self-insure. For wealthier households, this is manageable.
Join a Medicare Advantage plan. Most MA plans will cover some level of dental care, but it’s critically important to dive into the details – and that can be difficult. The Medicare Plan Finder doesn’t make this easy, and a quick survey I did this week turned up plans with annual coverage limits ranging from $500 to $2,300. Some cover only preventive care, others will cover more complicated, expensive procedures – up to a point. And then, you need to ask yourself whether it’s worth driving your overall coverage plan just for this feature? For example, if you have substantial prescription drug needs that will be covered by your MA plan, that’s an important decision point, too.
Buy a commercial plan. This really boils down to whether you want to pay for routine preventive care out of pocket or not – and whether it is worthwhile to insure youself up to a total of $1,500 or $2,000 in annual care. From where I’m sitting this hardly seems worth it.
Visiting a Social Security office in the post-COVID era
When the pandemic struck last year, the Social Security Administration shut down its national network of more than 1,200 offices as it scrambled to protect the public and its employees from the coronavirus.
The agency, which served 43 million visitors in those offices in 2019, was forced to meet immense technological and administrative challenges practically overnight as it shifted to an almost completely remote operation.
Social Security offices help older Americans with everything from retirement and Medicare claims to applications for disability insurance and Supplemental Security Income (S.S.I.), a benefit program for low-income disabled or older people. Yet even as Covid-19 cases decline and businesses and other public places reopen around the country, the timeline for a full reopening of the office network is uncertain. The agency is slowly bringing back workers in accordance with safety guidelines established by the federal government.
Yesterday I posted about how State Senator Richard Martwick has been chair of both the state House and Senate pension committees for a decade and has ignored the Tier 2 pension time-bomb.
To review, teachers hired after January 1st, 2011 are paying the full 9% pension contribution, but 2% of that is going to pay to slow the pension debt. Plus, if they make it to retirement age, the Tier 2 pension benefit will be grossly reduced.
I talked to my retired teacher and pension blogger buddy, John Dillon, this morning.
“Thanks, Fred, for bringing this up again. Take a close look at Martwick’s smile and it’s much worse than you said.”
The safe harbor formula gives states the right to decide what it means to be vested
For teachers, eleven of the states without social security coverage require a five year vesting period.
Four states – Connecticut, Georgia, Massachusetts and our own Illinois – do not offer social security to members of TRS.
Illinois withholds all employer-provided retirement benefits from Tier 2 teachers until they have reached 10 years of service. This long a vesting period would be illegal in the private sector.
Why have Martwick and others ignored the Tier 2 time-bomb?
Because maybe like Tier 1, the problem is an illusion.
The Tier 1 debt is so large nobody really believes it can or ever will ever be paid. Some legislators will whisper the obvious. They will pay the amount they decide – not the actuarial amount – each year.
Pensions funds will be shorted, but the bond holders will get theirs.
And then Tier 1 teachers will die.
A similar solution is whispered about Tier 2.
An average of 52 percent of new teachers will quit teaching and fail to vest into their state retirement system, leaving them with no benefit at all.
The IRS rules allow for this by specifically exempting vesting periods from the safe harbor test.
The safe harbor test requires each retiring teacher who is vested to receive a benefit equal or better than they would receive from Social Security.
It is unlikely Illinois Tier 2 teachers will meet the safe harbor test.
So, over half of our Illinois younger colleagues laboring under Tier 2 will opt out of teaching before they are vested, taking their money and moving along without any return for up to ten years service.
Of course the Martwick smile says, “we just love short timers.”
Career teachers with the skills that come with it?