As Vice President Harris commits to tackling medical debt within her economic strategy, KFF Executive Vice President for Health Policy Larry Levitt examines how this issue reflects a wider challenge of accessible healthcare. He also discusses recent initiatives aimed at resolving the problem in this JAMA Health Forum post.
High cost-sharing and expenses that are not covered by insurance can result in substantial medical bills for some individuals. However, financial burdens are not the sole obstacles to accessing health care.
A recent analysis by KFF indicates that many adults encounter logistical challenges when seeking care, such as conflicting work schedules or difficulty in finding an in-network provider or securing an appointment. In 2022, approximately 1 in 5 adults under 65 faced at least one barrier to obtaining care beyond just cost.
The comprehensive analysis and additional data related to health costs are accessible on the Peterson-KFF Health System Tracker, an online platform dedicated to tracking and evaluating the performance of the U.S. health system.
Under a Biden administration rule change, DACA (Deferred Action for Childhood Arrivals) recipients will be eligible to enroll through the health insurance Marketplace and apply for tax credits starting Nov. 1, 2024. The federal government estimates that 100,000 people will be newly eligible for Marketplace coverage under the rule.
Ever since the ACA Marketplaces opened for business in the fall of 2013, they could be used by American citizens as well as lawfully present immigrants. But although DACA recipients are considered lawfully present for some purposes, they have never been allowed to enroll in coverage through the federally run HealthCare.gov Marketplace platform or most of the state-run health insurance Marketplaces.
The change in federal rules will allow DACA recipients in some states to shift from state-funded Medicaid or state-funded subsidy programs onto an ACA Marketplace plan with federal subsidies. For example, California, Colorado, and Washington already offer state-funded enrollment opportunities for DACA recipients. In most states, the new rules will make DACA recipients newly eligible for income-based financial assistance with their health coverage.
In August 2024, 15 states filed a lawsuit challenging the Biden administration’s decision to allow DACA recipients to enroll in Marketplace health coverage. Two of these states (Idaho and Virginia) run their own health insurance Marketplaces, while the other 13 use the federally run HealthCare.gov platform. The lawsuit – which cites the 2023 proposed rule’s estimate of 200,000 newly eligible individuals instead of the final rule’s 100,000 estimate – asks the federal court to postpone the effective date of the DACA health insurance Marketplace access rule.
The plaintiff states have also asked the court to vacate the rule on the grounds that the definition of “lawfully present” it proposes is “contrary to law and unreasonable, arbitrary, and capricious,” and enjoin the Centers for Medicare & Medicaid Services from enforcing the rule. So the implementation of the DACA health insurance Marketplace access rule could potentially change, pending the outcome of the litigation.
The Deferred Action for Childhood Arrivals program was created in 2012 to protect young people who had arrived in the United States as children without proper immigration paperwork. The program temporarily protects them from deportation and allows them to work in the U.S. but does not grant them lawful status in the U.S. DACA recipients must renew their DACA status every two years.
As a result of a 2023 court order, U.S. Citizenship and Immigration Services is no longer processing new DACA applications. But the agency is continuing to process renewal applications for people who received their DACA status before July 16, 2021.
All DACA recipients – commonly referred to as “Dreamers” – are undocumented immigrants who came to the United States when they were children. But most Dreamers are not enrolled in DACA. Although an estimated 3.6 million Dreamers are living in the U.S., only about 530,000 of them are DACA recipients. Dreamers who are not enrolled in DACA will continue to be ineligible to enroll in Marketplace coverage in most of the country. (Washington does allow undocumented immigrants to use its Marketplace; Colorado has a separate platform, alongside the state-run Marketplace, that undocumented immigrants can use).
The term Dreamers comes from the DREAM Act (Development, Relief and Education for Alien Minors Act), which would have given legal status to all eligible individuals who arrived in the U.S. as children without documentation. This legislation was first introduced in Congress in 2001 and has been reintroduced numerous times since then, but has never passed.
Under the ACA, states have the option to create a Basic Health Program (BHP), although only three have done so (New York, Minnesota, and Oregon). A BHP provides coverage, with zero or low premiums, to people who don’t qualify for Medicaid and whose household income is up to 200% of the federal poverty level. (New York recently received federal permission to extend its BHP to 250% of the federal poverty level.)
The new federal rules allow DACA recipients to enroll in BHP coverage starting in November 2024, and the administration projects that roughly 1,000 DACA recipients will qualify for BHP coverage under the new rule.
But from a consumer perspective, Oregon is the only state where DACA health insurance eligibility rules for BHP coverage will change in November 2024:
Minnesota has allowed DACA recipients to enroll in BHP coverage since 2017, using state funds to provide the coverage. The federal rule change means that the state will no longer need to fully fund BHP coverage for DACA recipients, but it won’t change anything about enrollees’ eligibility for coverage.
New York began allowing DACA recipients to enroll in BHP coverage in August 2024, under the terms of a 1332 waiver amendment.
But Oregon’s BHP, which became operational in July 2024, does not currently allow DACA recipients to enroll. That will change in November 2024 due to the new federal rule, and DACA recipients will be eligible for 2025 coverage through Oregon’s BHP.
If any other states choose to create a BHP in the future, coverage under those programs would be available to DACA recipients under the new federal rules.
DACA recipients can only enroll in Medicaid if a state opts to allow this and uses state funds to provide the coverage, which a few states do. State Medicaid programs are typically funded with a combination of state and federal funds, but federal funds cannot be used to provide Medicaid to DACA recipients.
The initially proposed federal rule change would have allowed DACA recipients to enroll in Medicaid and the Children’s Health Insurance Program (CHIP) but that change was not finalized. Instead, the Centers for Medicare & Medicaid Services (CMS) notes that “we are taking more time to evaluate and carefully consider the comments regarding our proposal with respect to Medicaid and CHIP.”
However, DACA recipients will be able to qualify for income-based subsidies for Marketplace plan premiums even with income below the federal poverty level, as is the case for lawfully present immigrants who have been in the U.S. for under five years and are thus ineligible for Medicaid in most states.
For U.S. citizens and immigrants who have been lawfully present in the U.S. for more than five years, premium subsidies are not available if their income is below the federal poverty level, as the ACA called for these applicants to be eligible for Medicaid instead.)
The DACA health insurance rule change allows DACA recipients to enroll in Marketplace health coverage and qualify for federal premium subsidies. (As noted above, DACA recipients do not have lawful status in the U.S., but they are considered lawfully present for some purposes.)
But beyond that, federal funding cannot be used to provide health insurance for undocumented immigrants. And undocumented immigrants cannot enroll in coverage through the Marketplace unless a state has obtained federal permission to allow this. (Washington has done so, and Colorado established a separate enrollment platform that undocumented immigrants can use. Maryland intends to seek federal approval to allow undocumented immigrants to use its state-run Marketplace, albeit without any subsidies.
Undocumented immigrants can obtain health coverage outside the Marketplace, either from an employer or directly purchased from an insurance company. And in some states, they can be eligible for state-funded Medicaid coverage. But about half of all undocumented immigrants in the U.S. are uninsured.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.
This brief was revised in August 2024 to incorporate developments in the Drug Price Negotiation Program since the August 2023 edition, including the announcement of negotiated prices for the initial round of selected medications.
The Inflation Reduction Act of 2022 (the Act), signed by President Biden in August 2022, includes various provisions aimed at reducing prescription drug costs for Medicare beneficiaries and lowering federal drug spending. A central feature of the Act mandates the Secretary of Health and Human Services (HHS) to engage in price negotiations with pharmaceutical companies for specific drugs covered under Medicare Part D (starting in 2026) and Part B (beginning in 2028). This new directive follows years of legislative debate regarding granting the federal government the authority to negotiate drug prices in Medicare, which coincides with the filing of numerous lawsuits aimed at obstructing this initiative. On August 15, 2024, CMS revealed negotiated prices for the list of 10 Part D drugs earmarked for negotiation.
This FAQ section draws from CMS’s guidance for the inaugural year of the Medicare drug price negotiation program and the statutory framework of the Act. It addresses queries regarding the new negotiation program and CMS’s implementation approach, particularly focusing on details relevant for 2026:
For 2026, CMS has selected 10 Part D drugs for negotiation with manufacturers. The list of these 10 drugs was published in August 2023. The selected drugs span various medical conditions, including diabetes (Farxiga, Fiasp/NovoLog, Januvia, Jardiance), blood clots (Eliquis, Xarelto), heart failure (Entresto, Farxiga), psoriasis (Stelara, Enbrel), rheumatoid arthritis (Enbrel), Crohn’s disease (Stelara), and blood cancers (Imbruvica) (Refer to Table 1).
The scope of drugs subject to price negotiation will expand in forthcoming years: 15 Medicare Part D drugs for 2027, another 15 drugs covered under Medicare Part D or Part B for 2028, and an additional 20 drugs covered under Part D or Part B from 2029 onwards. The total number of drugs with negotiated prices will accumulate over time.
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On August 15, 2024, CMS announced the negotiated prices for the initial 10 drugs selected for negotiation. These prices will become effective for Medicare beneficiaries on January 1, 2026. According to CMS, had the negotiated prices for these 10 drugs been implemented in 2023, Medicare would have saved $6 billion, equating to net savings of 22% on these medications. Additionally, Medicare beneficiaries are estimated to save $1.5 billion when these negotiated prices are enforced in 2026.
CMS will release an explanation of the negotiated prices for the first 10 selected drugs by March 1, 2025, detailing factors considered during the negotiation process, including manufacturer-specific financial data and evidence on the clinical benefits of the selected drugs compared to alternatives.
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Drugs eligible for price negotiation in 2026 must be covered under Medicare Part D, specifically being single-source brand-name drugs or biological products without therapeutic equivalents that are marketed bona fide (defined below). Additionally, a drug must be at least 7 years (for small-molecule drugs) or 11 years (for biologics) past its FDA approval date by the time the negotiation list is published. In practice, for a single-source drug to qualify for negotiation in 2026, it must have been approved by September 1, 2016, and a biological product must have been licensed by September 1, 2012. For drugs with multiple FDA approvals, CMS uses the earliest approval date to determine eligibility.
Qualifying ‘single source drug’ definitions exclude certain drugs: (1) drugs marked for a single rare disease or condition (the orphan drug exclusion); (2) drugs with combined total spending under Part D and Part B of less than $200 million (using data from June 1, 2022, to May 31, 2023, for the 2026 evaluation); and (3) plasma-derived products. Furthermore, for the years 2026 to 2028, the Act makes exceptions for certain “small biotech” drugs (details outlined below).
According to CMS, if a drug is designated for multiple rare diseases or conditions, it will not qualify for the orphan drug exclusion, even if it is not approved for those additional indications. CMS will consider only active designations and approvals in these evaluations.
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The 10 Part D drugs chosen for price negotiation in 2026 were derived from the top 50 negotiation-eligible Part D drugs with the highest total Medicare Part D expenditures. Total expenditures are defined as overall gross covered prescription drug costs. To establish this ranking, CMS first identified the qualifying single-source drugs among the covered Part D drugs, applying relevant statutory exclusions (as mentioned earlier). It then calculated total expenditures for each qualifying drug, leveraging spending data from the year spanning June 1, 2022, to May 31, 2023. The top 50 drugs with the highest total expenditures from that time frame were designated for negotiation eligibility in 2026.
Under the Inflation Reduction Act, a delay in drug selection for negotiation is permitted if they are biological products with a “high likelihood” of biosimilar market entry within two years of the publication date of the selected drug list (elaboration below). Consequently, CMS initially removed any biological products that could qualify for delayed selection before determining the 10 highest-ranked Part D drugs. However, no such biological drugs met the criteria for a delayed selection based on potential biosimilar entries.
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For the 10 selected Part D drugs whose negotiated prices will take effect in 2026, Figure 1 outlines a timeline of critical dates and activities related to the negotiation process.
CMS will announce the next set of 15 Part D drugs selected for negotiation by February 1, 2025. The negotiation for these drugs will commence on February 28 and conclude on November 1. CMS will unveil maximum fair prices for these drugs by November 30, 2025, with negotiated prices coming into effect on January 1, 2027.
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The presence of a bona fide marketed generic or biosimilar for any strength or dosage form of a drug will disqualify that drug from being considered as a qualifying single-source drug. In evaluating whether a potential qualifying drug may be disqualified based on the existence of a marketed generic or biosimilar, CMS will leverage information from diverse sources.
CMS will consult FDA references to ascertain if a generic or biosimilar has received approval. To assess whether generic or biosimilar equivalents were available and marketed bona fide for potential qualifying single-source drugs in 2026, CMS analyzed Part D claims data from August 16, 2022, to August 15, 2023, alongside Average Manufacturer Price (AMP) data from August 1, 2022, to July 31, 2023, to gauge utilization and sales of generics or biosimilars.
According to CMS guidance, the determination related to bona fide marketing will not strictly adhere to a quantitative definition; it will assess the overall circumstances. This includes examining sales data, availability for purchase, and any manufacturer agreements that might limit the drug’s market presence. CMS will perform ongoing evaluations to affirm that “meaningful” competition exists and that marketing practices are bona fide.
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In the years 2026 through 2028, the Inflation Reduction Act specifies that “small biotech” drugs will be exempt from negotiation. To qualify for the “Small Biotech Exception” in 2026, total Part D expenditures for the drug in 2021 must comprise 1% or less of total Part D expenditures across all covered drugs, and 80% or more of total expenditures under Part D for all of the manufacturer’s drugs with a Coverage Gap Discount Program agreement in 2021. CMS will handle these calculations.
Manufacturers requesting consideration for this exception must provide information regarding their products to CMS. For 2026, requests for exceptions were due by July 3, 2023 to allow CMS to determine qualifying drugs before the September 1, 2023, publication date of selected drugs for that year. For 2026, CMS identified four drugs that qualified for the Small Biotech Exception based on the information submitted by their manufacturers.
Manufacturers desiring consideration for this exception for subsequent years must resubmit their requests, as CMS’s decisions regarding the Small Biotech Exception for 2026 will not carry over.
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The Inflation Reduction Act allows for a delay in selecting drugs for negotiation if they are biological products where a “high likelihood” of biosimilar entry exists within two years of the publication date of the selected drug list. For 2026, this means that licensure and marketing of a biosimilar must be highly likely to occur before September 1, 2025. This delay aims to avoid creating financial incentives that might hinder biosimilars’ market entry if a reference product (the original biological product against which a proposed biosimilar is compared) is selected for negotiation at a price lower than potential competitor biosimilars.
To evaluate a delay request, the manufacturer of the biosimilar must submit documentation to CMS by the selected drug publication date. The biosimilar manufacturer must differ from the reference product manufacturer, and no agreements should exist between them that limit the biosimilar’s market presence in the U.S. Manufacturers will not know if the reference product will be selected for negotiation when submitting requests, but CMS will ignore requests if the reference product isn’t selected. The deadline for submitting biosimilar delay requests for 2026 was May 22, 2023.
CMS will assess whether there’s a likelihood of biosimilar entry based on two criteria: (1) whether a biosimilar licensure application has been accepted or approved by FDA (no later than August 15, 2023, for the 2026 negotiation year), and (2) “clear and convincing” proof that the biosimilar will reach the market within two years post-publication of the selected drug list, ensuring no patent barriers impede entry.
For 2026, CMS confirmed no biological products would have been selected for negotiation but for successful delay requests.
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The Inflation Reduction Act mandates CMS to take into account specific manufacturer-related factors and information regarding therapeutic alternatives in its negotiations to establish the “maximum fair price” for selected drugs, though it does not prescribe how to weigh these elements in formulating its offer.
Manufacturer-specific factors relevant to selected drugs include:
For the 10 Part D selected drugs in 2026, these data requirements must be provided to CMS by October 2, 2023.
Information about therapeutic alternatives includes:
CMS guidance states submissions concerning these factors may come from various entities, such as selected drug manufacturers, other drug makers, Medicare recipients, academic experts, clinicians, etc. All submissions were due by October 2, 2023, for the selected drugs in 2026. In addition to analyzing submitted information, CMS will review existing literature and real-world evidence, perform internal analyses, and consult experts on the clinical benefits of selected drugs and alternatives.
The Act explicitly prohibits the use of comparative clinical effectiveness research that values extending life differently based on patient age, disability, or terminal status. Thus, health outcome evidence founded on quality-adjusted life years (QALYs) cannot be included in negotiating the maximum fair price.
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Medicare beneficiaries enrolled in Part D stand-alone prescription drug plans or Medicare Advantage plans with drug coverage can receive the maximum fair price for selected drugs dispensed directly by retail or mail-order pharmacies. For selected drugs covered under Part B and administered in provider settings, beneficiaries enrolled in Part B (including both traditional Medicare and Medicare Advantage plans) are eligible for the maximum fair price. (Negotiation for Part B drugs will begin in 2028).
As per CMS guidance, the maximum fair price for a Part D selected drug must be accessible when enrollees utilize their Part D coverage but not during other payment arrangements, such as those using the Retiree Drug Subsidy, discount cards, or cash transactions.
While the Inflation Reduction Act obligates manufacturers of selected drugs to guarantee access to the maximum fair price for qualifying individuals and providers, CMS aims to contract a “Medicare Transaction Facilitator” to streamline communication within the prescription drug chain, enabling manufacturers to relay the maximum fair price to eligible dispensers.
Manufacturers failing to guarantee access to the maximum fair price for selected drugs may face civil monetary penalties.
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The Inflation Reduction Act establishes a ceiling for the maximum fair price of a drug. This ceiling is the lesser of the drug’s enrollment-weighted negotiated price (after all price concessions, including rebates) for a Part D drug, the average sales price for a Part B drug (inclusive of all rebates paid to non-federal purchasers, excluding Medicaid), or a specified percentage of the drug’s average non-federal average manufacturer price (non-FAMP). This percentage varies with the time elapsed since FDA approval or licensure: 75% for small-molecule drugs and vaccines between 9 and 12 years old; 65% for drugs between 12 and 16 years old; and 40% for drugs older than 16 years. Therefore, as a drug remains on the market longer, its maximum fair price ceiling declines.
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To formulate its initial offer for the maximum fair price of a selected drug, CMS will: (1) identify therapeutic alternatives for the selected drug; (2) ascertain pricing information about those alternatives to determine the basis for its initial offer; (3) adjust the offer based on clinical benefit evidence relative to those alternatives; and (4) refine the offer price as required based on manufacturer-specific data.
According to the guidance, CMS will consider the prices of therapeutic alternatives to determine its initial offer starting point. This considers the net prices (after all concessions) for Part D drugs and/or the Average Sales Price (ASP) for Part B drugs that address the same indication as the selected drug, including generics or biosimilars (unless these prices exceed the statutory cap). If multiple therapeutic alternatives exist, CMS will select a starting price from the price range of these products.
For drugs with no therapeutic alternatives or when alternative prices exceed the cap, CMS will utilize the Federal Supply Schedule (FSS) or “Big Four Agency” prices. If these approaches yield a price that exceeds the statutory ceiling, CMS will use the ceiling as the basis for its initial offer.
CMS will adjust the initial offer based on comprehensive evidence regarding the selected drug’s clinical advantage compared to alternatives. This includes examining safety and efficacy data, improvements in clinical outcomes, and the effects on diverse populations, particularly older adults and individuals with disabilities. In situations where a selected drug lacks therapeutic alternatives, CMS will assess clinical evidence for meeting unmet medical needs.
After evaluating clinical benefit information, CMS will adjust its initial offer price to generate a “preliminary price.” This price will then undergo adjustments using the manufacturer-specific data, which may include:
After incorporating necessary modifications to the preliminary price based on these data analyses, CMS will arrive at its initial offer for the maximum fair price.
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CMS’s guidelines outline several phases in the negotiation process (Figure 1). These phases, along with pertinent dates for selected drugs in 2026, are as follows:
If an agreement isn’t established by the deadline, manufacturers may incur an excise tax, which will be managed by the IRS as outlined in the Inflation Reduction Act. A provision for manufacturers opting out of the negotiation program is available, allowing them to withdraw drugs from Medicare and Medicaid coverage to avoid the excise tax.
Manufacturers can divulge negotiation-process information with CMS if they choose. However, CMS will not discuss the specifics of any negotiation process related to individual manufacturers but retains the right to address it if disclosures occur from the manufacturers themselves.
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Drugs are not eligible for selection if an FDA-approved or licensed generic or biosimilar referencing that drug is actively marketed. (Authorized generics do not meet this criterion since they are the same drug product under a different label.) If CMS determines that a generic or biosimilar drug receives approval post-selection for negotiation, the negotiation process will either halt or be delayed. The drug remains on the selected list but will not have a maximum fair price negotiated. For 2026, CMS needed to make this determination between September 1, 2023, and August 1, 2024.
If CMS confirms the availability of a generic or biosimilar after establishing a maximum fair price, that price will apply in 2026. However, if this determination occurs between August 2, 2024, and March 31, 2026, the maximum fair price will apply solely for 2026, and the drug will be removed from the selected list for 2027. If the determination occurs between April 1, 2026, and March 31, 2027, the maximum fair price will be effective for both 2026 and 2027, and the drug will be removed from the selection for 2028.
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The Act delineates various components of the drug price negotiation program that are exempt from administrative and judicial review, including:
There is considerable uncertainty regarding the number of Medicare beneficiaries who will benefit from reduced out-of-pocket expenses in any given year under the negotiation program, as this will depend on which drugs undergo negotiations and the price reductions achieved compared to their previous prices. Furthermore, out-of-pocket costs for Part D enrollees will also depend on whether they face flat copayment amounts or coinsurance rates for the drugs in their plans. If coinsurance is in effect, beneficiaries could save, assuming the negotiated maximum fair price is lower than their plan’s price.
Apart from potential reductions in out-of-pocket expenses, the drug price negotiation program may enhance Medicare Part D enrollees’ access to negotiated Part D drugs, as plans must cover all drugs with negotiated maximum fair prices, encompassing all dosage forms and strengths. In the absence of this coverage mandate, there could be cases where some selected drugs or their forms might not be included in all Part D formularies. Currently, Part D plans typically can select which drugs to include or exclude from their formularies, abiding by CMS’s formularies guidelines and requirements, with certain exceptions for drugs in the six protected classes where broad coverage is mandated. CMS has expressed its intention to utilize its annual formulary review process to ensure comprehensive coverage of all dosages and formulations of selected drugs. It also expects plans to justify exclusions, non-preferred tier placements, or the application of more restrictive utilization management techniques for selected drugs compared to non-selected alternatives in the same class.
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A KFF Health Tracking poll indicates that a majority of adults support the federal government’s ability to negotiate drug prices with manufacturers to secure lower costs. More than 80% of adults (83%) endorse allowing the government to negotiate lower prices that would apply to both Medicare and private insurance (See Figure 2). Even after considering counterarguments for and against government involvement in drug price negotiations, a significant majority of adults continue to advocate for this approach. However, KFF polling also reflects a considerable lack of awareness among adults regarding the recent legal requirement for the federal government to negotiate the prices of certain prescription drugs for Medicare recipients. Just over one-third of adults overall (36%), and nearly half (48%) of those aged 65 and older, report awareness of this Inflation Reduction Act provision.
Since June 2023, numerous lawsuits have been initiated against the drug price negotiation program by pharmaceutical manufacturers of selected drugs and organizations representing the pharmaceutical industry. As of August 2024, nine of these cases are active, presenting similar constitutional and statutory arguments against the program. Noteworthy constitutional claims include:
Additional constitutional objections include concerns regarding violations of the separation of powers and due process clauses, alongside statutory challenges under the Administrative Procedures Act.
To date, none of these lawsuits have favored the industry plaintiffs, although several cases are pending decisions at the district court level and others have appeals underway in various U.S. appellate courts. If conflicting rulings arise, it’s likely that one or more of these cases will be reviewed by the U.S. Supreme Court, though the timeline for such proceedings remains uncertain.
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This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.
Current trends in healthcare usage and expenditure indicate that health service spending has surpassed pre-pandemic levels, with costs escalating at a pace quicker than in recent years. Nevertheless, the use of healthcare services varies significantly by setting and market. For instance, certain indicators of hospital utilization are still below pre-pandemic figures, potentially signaling a shift towards outpatient care.
This collection of charts explores the latest trends in healthcare utilization and expenditure using multiple data sources. By the first quarter of 2024, the annual increase in health services spending has outstripped levels seen prior to the pandemic.
The complete chart collection and additional information on health costs can be accessed at the Peterson-KFF Health System Tracker, a comprehensive online resource focused on evaluating and monitoring the efficacy of the U.S. health system.
Written by KFF’s Tricia Neuman, Juliette Cubanski, and Larry Levitt, this article in Health Affairs Forefront explores the implications of the inaugural Medicare drug price negotiations, detailing the savings they will provide for both the government and Medicare recipients. Additionally, the piece considers how candidates’ perspectives on this topic may influence the upcoming elections and the future of drug price negotiations by the government.
In 2022, out of the 167 million individuals with employer-sponsored insurance, 3.4 million utilized at least one of the top 10 drugs designated for Medicare price negotiations, as reported by a new KFF analysis. Medicare anticipates releasing the negotiated drug prices, which are set to take effect in 2026, no later than September 1, 2024.
The most frequently prescribed drug for those with employer-sponsored health insurance was Jardiance, a medication used for managing diabetes and heart failure, with over 911,000 enrollees using it.
Looking ahead, the Medicare program will negotiate prices for additional medications, potentially affecting millions more individuals with employer coverage. Currently, the impact of reduced drug prices in Medicare on private insurance plans is not direct, and the indirect effects remain uncertain. Some experts contend that lower negotiated prices in Medicare could lead to increased prices in private insurance, whereas others argue that these Medicare prices may establish a benchmark, facilitating savings.
The complete analysis and further information regarding health costs can be found on the Peterson-KFF Health System Tracker, a dedicated online resource for monitoring and evaluating the U.S. health system’s performance.
In 2022, out of the 167 million individuals with employer-sponsored insurance, 3.4 million utilized at least one of the first 10 medications earmarked for Medicare price negotiations, according to a recent analysis. The drug most commonly used by those with employer-sponsored health insurance was Jardiance, which is prescribed for diabetes and heart failure, with over 911,000 enrollees using it.
This analysis leverages the Merative MarketScan 2022 commercial claims data to estimate the number of enrollees in the employer-sponsored insurance sector who use one or more of the ten drugs chosen for Medicare Part D price negotiations.
The complete analysis and additional information regarding health costs can be found on the Peterson-KFF Health System Tracker, a comprehensive online resource aimed at monitoring and evaluating the performance of the U.S. healthcare system.
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<p class="has-text-align-center" style="margin-top:0px;margin-bottom:0px;padding-top:0px;padding-bottom:18px;font-size:16px">The content was last updated on September 24, 2024</p>
<p class="has-text-align-center">The general election campaign is in progress, featuring former President Trump as the Republican nominee and Vice President Harris as the Democratic nominee, both vying for the presidency. While health care reform might not be the focal point of this election as it has been in previous years, it continues to be a crucial issue for many voters. Trump and Harris possess contrasting records and perspectives on health care. This comparative analysis serves as a timely resource to grasp Trump’s presidential achievements alongside Harris’ record in both the Biden-Harris administration and her prior public service, along with their present views and proposed policies. The proposals refer to the candidates' time in their respective positions as president and vice president unless specified otherwise through text or links. This resource will be regularly updated as new information and policy specifics become available during the campaign.</p>
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According to a recent KFF analysis of preliminary rate filings, ACA Marketplace insurers are suggesting a median premium hike of 7% for 2025. This is quite similar to the 6% increase that was proposed for 2024. The proposed rate adjustments from insurers, which predominantly range from 2% to 10%, are subject to change during the review phase.
While the majority of Marketplace participants benefit from subsidies and are unlikely to bear these increased costs directly, rising premiums typically lead to augmented federal expenditures on subsidies. Additionally, the reasons put forth by insurers for these premium adjustments provide insights into the broader factors influencing health spending.
KFF’s analysis of publicly available documents reveals that insurers attribute the escalation in premiums for 2025 to rising healthcare costs, specifically for hospital services, alongside an uptick in the utilization of weight loss and other specialty medications.
This year, the surge in costs that insurers encounter for medical services appears to have a more significant impact on premiums than the increase in care usage. Insurers highlight that workforce shortages and the consolidation of hospital markets, which exert upward pressure on healthcare costs and prices, are contributing to the rise in health insurance premiums for 2025.
Simultaneously, the escalating demand for GLP-1 medications like Ozempic and Wegovy, which are prescribed for diabetes and obesity, is driving up spending on prescription drugs.
The complete analysis and additional information regarding health costs can be accessed at the Peterson-KFF Health System Tracker, an online platform committed to tracking and evaluating the performance of the U.S. healthcare system.