A Medicare Plan Distributor Reacts to the State of the Union Address

He also spoke at length about his intention to expand the list of prescription medications that Medicare can negotiate the price on to 50, from the maximum of 20 medications set by the new Inflation Reduction Act price negotiation program.

Commercial Coverage

The Medicare maximum out-of-pocket spending limit for prescription costs will be $2,000 starting in 2025.

The president proposed applying that same annual prescription drug spending limit on commercial health coverage.

There are two big problems with this:

1. Congress would need to go along with that (and they are not looking for ways to add to the national deficit.
2. In many areas, there is only a few carriers offering coverage in the commercial market, and they are not likely to go along with this idea either, but it sounds good when you are the president and you are making a speech.

Drug Development Subsidies

If I were president and I was making a State of the Union address, I would propose not allowing a U.S.-based pharmaceutical company to drastically reduce the cost of a medication when sold to a foreign country as compared to within the U.S. borders.

The way our system is arranged now, U.S. citizens are paying most of the research and development costs for new medications. Then, our Food and Drug Administration tests the medication for soundness before it gets sold in foreign markets.

President Biden. Photo: Bloomberg

Jerry Cohen is a broker in the life, health and Medicare supplement insurance markets. His office is in Port Jefferson Station, New York.