Election Hail Mary: $200 Rx Discount Cards for Seniors
In what appears to be a proverbial Hail Mary leading up to the November elections, President Trump announced yesterday that Medicare beneficiaries would receive $200 discount coupons “in a few weeks” to help with drug costs. Several questions:
Wait…can he DO that?! Probably not. The money to cover the discount cards (upwards of $7 billion) will come from the government, and the Constitution is quite clear that only Congress has the power to spend money from the U.S. Treasury. The White House is using “savings” from the theoretical “most favored nations” Executive Order released last weekend to cover the costs. As the kids say: that’s…not how this works. So yeah, the White House is essentially using $7 billion that hasn’t been appropriated by Congress to send senior citizens $200 weeks before an election. It should also be noted that last week, the New York Times reported that the White House attempted to get pharmaceutical manufacturers to fund similar discount cards (for $100), but the industry rejected the idea. So now they are back, with double the value, except paid for by taxpayers, not the pharmaceutical industry.
The White House also doesn’t have authority to implement a program like this without Congressional approval. While the section of the Social Security Act the White House claims it is using grants limited authorities to implement demonstration programs without Congressional approval, the cards do not seem to meet the statutory requirements of such demonstrations. All that being said, “sue the Administration to block sending seniors a $200 prescription drug discount right before a big election” is probably not a smart strategy, no matter how right you are.
What do the cards do exactly? We don’t have a lot of details yet, but it seems like they would cover up to $200 of beneficiary Part D copayments. So not lowering drug prices, per se, but beneficiary out-of-pocket costs. Which would be great in January when all beneficiaries are at the beginning of the benefit year. But less impactful in October/November, when beneficiaries who would benefit most (i.e. those on high-cost specialty drugs) are already in catastrophic coverage with lower copayments. And low-income beneficiaries already have heavily subsidized copayments (<$10) so the impact will be blunted there as well.
It will be interesting to see how all of this plays out. As a reminder, President Trump has consistently been promising us that he will release a comprehensive replacement plan for the Affordable Care Act “in two weeks” for the last 3 ½ years. Sending millions of seniors $200 coupons that will seamlessly integrate into pharmacy systems is complex and takes time, so it’s unclear whether the Administration can even get these into beneficiaries’ hands before November 3. And if they do, will it be enough? I guess we’ll find out November 4.
