CBO Predicts 20% Increase in Part D Premiums from H.R. 3200
This afternoon CBO released a letter requested by Ranking Member Camp regarding Part D provisions in H.R. 3200 as introduced, which can be found here.
The analysis found that provisions included in the bill “would lead to an average increase in premiums for Part D beneficiaries of about 5% in 2011, rising to about 20% in 2019.” The letter noted that federal spending and Part D premiums would rise due to the gradual elimination of the Part D “doughnut hole,” and that the “voluntary” discounts provided in the “doughnut hole” until its elimination — one component of the PhRMA “deal” with the White House — “would increase federal spending” and thus beneficiary premiums. Finally, while an expansion of drug rebates (i.e. government-imposed price controls) to dual eligible beneficiaries enrolled in both Medicare and Medicaid would lower federal spending on net, CBO estimates that pharmaceutical companies “would probably lower the rebates they pay to prescription drug plans” covering non-Medicaid eligible beneficiaries, which “would lead to an increase in beneficiaries’ premiums…[and] an increase in beneficiaries’ payments for cost sharing.”