President Donald Trump has been busy rescinding Biden-era Executive Orders in his first days in office, including one that had the potential to lower the cost of prescription drugs for Americans on Medicare.
Known as Executive Order 14087, it was designed to identify a list of prescription drugs that would, under the plan, require only a $2 copay a month for anyone on Medicare. Former President Biden had directed the Center for Medicare and Medicaid Innovation, an arm of the Centers for Medicare and Medicaid Services, to look into ways to make prescription drugs cheaper for Medicare recipients.
“Too many Americans face challenges paying for prescription drugs. On average, Americans pay two to three times as much as people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford their medications,” Biden said at the time. “Nearly 3 in 10 American adults who take prescription drugs say that they have skipped doses, cut pills in half, or not filled prescriptions due to cost.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Lowering drugs costs for Medicare enrollees
Drugs that were identified to be included on the Medicare $2 Drug List Model included ones to treat diabetes, high cholesterol and thyroid issues. The model aimed to “standardize cost sharing for low-cost generics through a new, easy-to-understand option for people with Medicare Part D enrolled in a participating plan and their health care providers,” wrote CMS when originally announcing the plan.
Other parts of the executive order included improving access to cell and gene therapies, which have high costs associated with them, and accelerating the evidence-gathering process for new drugs. Trump’s new executive order would take those mandates away from CMS.
More Medicare changes in the works?
In rescinding Biden’s executive order on prescription drugs and many others, Trump said, “The previous administration has embedded deeply unpopular, inflationary, illegal, and radical practices within every agency and office of the Federal Government.” He warned, “The revocations within this order will be the first of many steps the United States Federal Government will take to repair our institutions and our economy.” Other Medicare and Medicaid existing laws and regulations around prescription drugs remain in effect for now.
It's unclear what Trump will do about Medicare's ability to negotiate lower drug prices under the Inflation Reduction Act, put on the books in 2022. The Act allows Medicare to negotiate drug prices directly with pharmaceutical companies for the first time. President Trump hasn’t said if he supports the government’s ability to negotiate with the drug companies directly.
In the first round, Medicare negotiated lower prices for ten drugs. Last week, Medicare announced that it planned to negotiate prices for another 15 medications, including the popular weight-loss drugs Ozempic and Wegovy. The high costs associated with these drugs, which have proven effective, have been fiercely criticized by consumers.
Related content
-
Baby Boomers vs Gen X: Who Spends More?Baby Boomers and Gen X are guilty of spending a lot of money. Here's a look at where their money goes.
-
Retire in Finland and Live the Nordic DreamHere's how to retire in Finland as a US retiree. It's ideal for those who value natural beauty, low crime and good healthcare.
-
Baby Boomers vs Gen X: Who Spends More?
Baby Boomers and Gen X are guilty of spending a lot of money. Here's a look at where their money goes.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
Should You Ditch Your Medicare Advantage Plan? Most People DoIf you want to switch your Medicare Advantage plan or enroll in original Medicare, you're not alone. Here's when it's a good idea and how to go about it.
-
The 401(k) Mistake That Could Cost You Millions in Retirement SavingsThinking about reducing your 401(K) contributions in the current market? Here are six reasons why you may want to reconsider.
-
What the HECM? Combine It With a QLAC and See What HappensCombining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
I'm 60 With a $4.2 Million Nest Egg. Can I Stop Saving and Start Spending Until I Retire at 65?Should I continue contributing to my 401(k) or treat myself now?
-
These Jobs Reduce Your Alzheimer's Risk: How You Can BenefitTwo jobs are linked to a lower Alzheimer's risk. Even if you do a different kind of work or are retired, these jobs show how to keep your mind sharp.
-
My Professional Advice: When It Comes to Money, You Do YouThis is how embracing the 'letting others be' and 'learning to surrender' mindsets can improve your relationship with money.
