Health Care, Drug Prices to Be Cornerstone of State of the Union

WASHINGTON — President Joe Biden’s plans to do more to lower prescription drug prices and ensure the nation’s health care system works better for more Americans will be the centerpiece of his State of the Union address, the White House revealed Wednesday.

In a conference call with reporters, senior White House officials said among the things the president will tell a joint session of Congress Thursday night is that he wants to more than double the size of Medicare’s new drug price negotiation program.

The current program is designed to allow Medicare to negotiate the prices of up to 20 prescription drugs per year.

While the first round of negotiations is ongoing — the last word from the Centers for Medicare & Medicaid Services is that the drug manufacturers have submitted price counteroffers and negotiations are continuing — the president is so confident in the outcome of the program that he will propose increasing the number of drugs subject to negotiation to 50.

“This proposal will bring more drugs into the negotiation process sooner,” an official said.

But the expansion of that program is just one of several proposals Biden will highlight during the State of the Union, proposals that build upon what the administration has already accomplished under the auspices of the Inflation Reduction Act and several executive orders.

In addition to the prescription drug pricing program, Biden will outline a list of priorities to extend affordable health care coverage through the Affordable Care Act, crack down on junk insurance plans and stem the tide of consumers being slammed by surprise medical bills.

Among other things, the president will appeal to the Republican-controlled House to expand the Inflation Reduction Act’s $2,000 annual cap on out-of-pocket expenses for prescription drugs to individuals who get their health insurance through their employers.

When the $2,000 out-of-pocket cap on prescription drugs purchased under Medicare goes into effect in 2025, nearly 19 million seniors and other beneficiaries are projected to save $400 per year on prescription drugs. 

“The president wants Congress to expand the $2,000 out-of-pocket cap to all private insurance so that all Americans have the peace of mind that comes with knowing that they won’t have to choose between filling their prescription or putting food on the table,” an official said.

Another area where the president will be asking Congress to act is on Medicare cost sharing.

Medicare is in the process of launching a new model to limit Medicare Part D cost sharing for certain generic drugs to just $2. 

On Wednesday, the Department of Health and Human Services published a list of dozens of generic drugs for the model, including drugs like statins to treat high cholesterol, beta-blockers for high blood pressure, and platelet inhibitors to prevent blood clots. 

On Thursday, the president will call on Congress to expand the cost limit on generic drugs to  all Medicare plans.

Biden will also appeal to Congress to expand the Inflation Reduction Act’s requirement that drug manufacturers pay rebates to Medicare when the prices of their products increase faster than the rate of inflation.

Specifically, the president will call on Congress to require those rebates for commercial drug sales, as well as sales to Medicare. 

“That will save the federal government billions of dollars, further curb prescription drug price inflation, and reduce health insurance premiums for people with private health insurance coverage,” the White House said.

The president is also expected to urge lawmakers to extend a $35-per-month cost cap for insulin beyond Medicare recipients, a measure that has been stalled in the U.S. Senate.

Another area in which the president is expected to appeal for an expansion regards so-called surprise medical bills. 

Though Congress passed a consumer protection bill to address the overall issue of surprise medical bills — the Consolidated Appropriations Act of 2021 — the legislation failed to cover certain key areas.

As of Jan. 1, 2022, consumers have enjoyed new billing protections when getting emergency care, non-emergency care from out-of-network providers at in-network facilities, and air ambulance services from out-of-network providers.

But the legislation’s many provisions failed to cover some sticker-shock inducing areas, like the cost of ground ambulance service.

Biden will also call on Congress to close the Medicaid coverage gap in the 10 states that have chosen not to expand Medicaid despite federal funding offers.

Finally, the president will call on Congress to make the expanded premium tax credits that the Inflation Reduction Act extended permanent.

“Without congressional action, millions of Americans will see their health insurance premiums spike by hundreds or thousands of dollars starting in the fall of 2025,” the White House said.

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