The US has long struggled with providing medical care to its citizens. Millions of Americans lack health insurance and the cost of care is unjustifiably high. Different governments have implemented measures aimed at reducing the burden that the American people bear as they attempt to safeguard their health. Providing drug subsidies through Medicare is among these measures. Recently, President Trump announced plans to significantly reduce the amount set aside for this subsidy. If this plan is implemented, patients will suffer and hospitals will be crippled.
Policy background
The Medicare drug subsidy program was developed in 1992 but underwent significant expansion under President Obama. This program sought to respond to the plight of poor households that faced tremendous difficulties in their quest to access care. Essentially, through this program, the US government compensated insurance companies for the discounts that they offer to poor households. The program set aside $7 billion for this purpose (Fottrell & Passy, 2017). President Trump has made his opposition to Obamacare clear. He has unsuccessfully sought to repeal the program. Recently, the Trump administration announced that it would slash the funding that is set aside for the Medicare drug subsidy (Evans, 2017). It is important to note that the new policy will only apply to certain drugs that are offered in certain hospitals for which Medicare currently provides coverage. The announcement that the funding for the program would be slashed prompted backlash from the medical community and other parties who fear that the new policy will adversely impact the delivery of medical services in the country. As part of the implementation of the policy, the Centers for Medicare and Medicaid services will provide hospitals with reimbursements that are 22.5% lower than the average sales price. This is indeed cause for concern for the hospitals that rely on the reimbursements to finance the operations.
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Effects
The implementation of the new policy that the Trump administration has announced will have far-reaching impacts. Most of the effects of the policy are negative. However, the Trump government maintains that once it is implemented, the policy will present some positive impacts. One of these impacts involves making the burden that insurance companies pay lighter. When announcing the policy, Trump noted that the policy was essentially a ‘bailout’ of the insurance companies (Fottrell & Passy, 2017). No details regarding how the policy amounted to a bailout was provided. The Centers for Medicare and Medicaid Services also announced that beneficiaries of Medicare would witness some positive impact. They will enjoy savings totaling $320 million. Reducing the amounts that the government spends on medicines is another potential positive effect of the new policy. One of the reasons that prompted the development of the new policy is that hospitals were overusing certain medications and were also prescribing expensive drugs (Evans, 2017). The government also hopes to benefit when the policy takes effect. It is hoped that the policy will allow the government to save as much as $1.6 billion (Evans, 2017).
As noted above, the impacts of the new policy will mostly be negative. One of these impacts concerns access to care and insurance. Rendering millions of Americans without coverage is among the negative effects. The Congressional Budget Office estimates that as many as 5% of Americans will be left without insurance (Fottrell & Passy, 2017). Another potential negative effect of the policy is that it will deny hospitals much-needed funding. When the new policy takes effect, hospitals will be given reimbursements that are 22.5% lower than the average sales price (Evans, 2017). The implication of this is that hospitals will struggle to provide care. The new policy will also make it more difficult for poor Americans to access medical services. As noted earlier, the Medicare drugs subsidy was developed for the purpose of lifting the burden off of the shoulders of poor American households. The new policy threatens to undo the gains that the US healthcare industry has witnessed thanks to the subsidy.
Interested parties
It was pointed out above that the announcement of the new policy inspired anger and strong opposition from various quarters. The American Hospital Association is among the parties that have registered their anger and disapproval of the new policy. The organization went as far as threatening to sue the Trump government (Silverman, 2017). The anger that this organization has expressed is justified and reasonable. The new policy threatens to disrupt the operations of hospitals. When it takes effect, the new policy will make it extremely difficult for hospitals to continue to provide care to poor Americans. The Association of American Medical Schools and the America’s Essential Hospitals are other parties that have expressed interest in the new policy. As is the case with the American Hospital Association, these organizations have also made their displeasure with the new policy clear (Rausch, 2017). They contend that the policy goes against the Social Security Act.
Recommendations
From the discussion above, it goes without question that the new policy is contentious. It was developed in an effort to discipline hospitals so that they do not overuse drugs and prescribe expensive medications. However, this policy also threatens to roll back the tremendous progress that the US healthcare industry has made in delivering care to poor Americans. It is clear that the disadvantages of the new policy far outweigh the few benefits that it presents. It is recommended that all necessary action should be taken to halt the implementation of the new policy. Given your position as an influential individual, it is hoped that you will be able to persuade your colleagues to rally behind the American Hospital Association and other parties that are aggressively seeking to stop the implementation of the new policy. If implemented, this policy will hurt hospitals and patients. The few benefits of the policy do not offer sufficient justification for its implementation.
References
Evans, M. (2017). Hospitals Vow to Keep Medicare Drug Subsidies. Retrieved 28 th November
2017 from https://www.wsj.com/articles/hospitals-vow-fight-to-keep-medicare-drug-subsidies-1509580552
Fottrell, Q. & Passy, J. (2017). 6 Critical Ways Trump Slashing Obamacare Subsidies could
Impact you. Retrieved 28 th November 2017 from https://www.marketwatch.com/story/6-critical-ways-trumps-cuts-in-obamacare-subsidies-could-impact-you-2017-10-13
Rausch, N. (2017). Hospitals to Sue HHS to Stop Cuts to Medicare Drug Payment Program.
Retrieved 28 th November 2017 from https://www.bloomberg.com/news/articles/2017-11-13/hospitals-sue-hhs-to-stop-cuts-to-medicare-drug-payment-program
Silverman, E. (2017). Hospitals Plan to Sue over Trump Changes to Medicare Drug Discounts.
Retrieved 28 th November 2017 from https://www.statnews.com/pharmalot/2017/11/02/hospitals-trump-medicare-drug-discounts/
