Horsford, Kim, Stevens Introduce Bill to Cap Drug Costs for Seniors

Press Release

WASHINGTON, D.C. -- Today, Representatives Steven Horsford (D-NV-04), Andy Kim (D-NJ-03), and Haley Stevens (D-MI-11) introduced the Capping Drug Costs for Seniors Act to create an out-of-pocket spending maximum for the millions of Medicare beneficiaries who are enrolled in the Medicare Part D prescription drug program. Representative Horsford is also introducing the SPIKE Act, which requires drug manufacturers to publicly justify large price increases and high launch prices.

Currently, the Medicare program has no out-of-pocket cap, and seniors and people with disabilities can face significant cost-sharing burdens. The Capping Drug Costs for Seniors Act would create a $2,000 out-of-pocket limit on prescription drugs under Medicare Part D and require health plans and pharmaceutical companies to pay a higher percentage of Medicare drug spending.

"In Nevada's Fourth District and across the nation, seniors and people with disabilities face crushing out-of-pocket drug costs that force them to choose between staying healthy and paying their bills. They deserve better," said Representative Steven Horsford. "I'm proud to partner with Reps. Kim and Stevens to introduce the Capping Drug Costs for Seniors Act, which will protect seniors from high drug cost-sharing and hold drug companies and health plans responsible for paying their fair share."

"No senior should be forced to decide between paying for their prescription drugs or paying for rent or food. We owe it to them to provide the peace of mind that comes with health care they can afford, and this bill would ensure that the cost for their lifesaving prescription drugs never spirals out of control. I'm proud to work with Congressman Horsford and Congresswoman Stevens on this important effort and look forward to getting this passed through Congress," said Representative Andy Kim.

"I am thrilled to partner with Reps. Horsford and Kim to stand-up for our seniors who continue to face skyrocketing pharmaceutical costs," said Representative Haley Stevens. "The number one issue I hear from seniors in Michigan's 11th district is that the cost of prescriptions is leaving them with the impossible choice of paying bills or purchasing life-saving medications. Creating an out-of-pocket limit on prescription drugs for Medicare beneficiaries is long overdue and I am proud to be an advocate for seniors in Congress."

Specifically, the Capping Drug Costs for Seniors Act does the following:

1. Creates a $2,000 out-of-pocket limit on prescription drugs under Medicare Part D.

This means that beneficiaries who have more than $2,000 in prescription drug spending will face no additional cost-sharing over that amount -- an approximately $4,000 savings for most individuals.
2. Requires health plans to pay more in the catastrophic coverage phase and reduces government reinsurance subsidies.

Decreases government reinsurance from 80 percent to 20 percent and increases plan responsibility from 20 percent to 50 percent, thereby increasing incentives for plans to better manage drug spending.
Reinsurance for the catastrophic spending grew by over 500 percent from $8.0 billion in 2007 to nearly $40.9 billion in 2018 -- and is now the single-largest component of total Part D spending.
3. Expands the current Medicare coverage gap discount program into a benefit-wide responsibility, thereby increasing incentives for plans to better manage drug spending.

Under current law, manufacturers pay 70 percent of the costs for beneficiaries in the coverage gap. This bill requires drug manufacturers to be responsible for 30 percent of costs in the catastrophic coverage phase, to ensure that drug companies help pay more of the costs for expensive drugs in catastrophic coverage.
Additionally, manufacturers would be required to pay 10 percent costs in the initial coverage phase. These program enhancements would be implemented beginning in plan year 2022.
The full text of the bill can be found here, and a one-page summary can be found here.

The Capping Drug Costs for Seniors Act was first introduced by Congressman Horsford in the 116th Congress.

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