Running head: HEALTH POLICY ISSUE 1
Health Policy Issue Paper
NURS 501-D03
Liberty University
Teresa Harper
May 12, 2017
Running Head: PRICE 2
Introduction
High prescription cost continues to plaque individuals as a major problem within
healthcare. The development of negotiations for insurance supplement plans are viewed to offer
relief in lowering some prescription cost on select prescribed medications. The bill H.R. 1775-
115th Congress (2017-2018); “Prescription Reduction in Costs for Everyone (PRICE) Act of
2017” was introduced March 29, 2017 to Congress by Democratic, House of Representive Of
Oregon, District 4; Mr. Peter DeFazion and Representative John Conyers; Democratic Michigan,
Districts 1.13, and 14. The current status of this bill is that it has been referred to Committee on
Energy and Commerce and the Committee on Ways and Means; where it still remains awaiting
for verification of the speaker. The purpose of H.R. 1775 bill (PRICE) is to ask for amendment to
Medicare Part D of title XVIII of the Social Security Act to direct the President to negotiate
prescription drug prices and set up a formulary on behalf of the Medicare beneficiaries (Civic
Impulse, 2017).
Running Head: PRICE 3
Background
The bill H. R. 1775-115th Congress “Prescription Reduction in Costs for Everyone
(PRICE) Act of 2017 was initiated development was early 2017 in the month of March. House of
Representatives Mr. DeFazio-Democratic of Oregon and Mr. Conyers-Democratic of Michigan
introduce the bill to Congress. The bill was sent to start the President to make an amendment to
Part D of title XVIII of Social Security Act and to negotiate lower prescription drug prices as
well to set up a formulary on the behalf of Medicare beneficiaries and other purposes (Civic
Impulse, 2017).
The Medicare Part D of title XVIII of social Security Act is Healthcare Insurance for the
Aged and Disabled Voluntary Prescription Drug Benefit Program. Medicare Part D includes five
subparts. Title VXIII of the Social Security Act, was originally chosen “Health Insurance for the
Aged and Disabled,” also known as Medicare. As part of the Social Security Amendments of
1965, the Medicare legislation set up a health insurance program for aged persons to complement
their retirement, survivors, and disability insurance benefits under Title II of the Social Security
Act. First implemented in 1966, Medicare covered most persons age 65 or over. Medicare
initially consisted of two parts: Part A: Hospital Insurance (HI), and Part B: Supplementary
Medical Insurance (SMI). Medicare Part A was automatically given free of cost, to eligible
persons age 65 or over for Social Security benefits, whether they claimed their monthly cash
benefits. Medicare Part A was to help cover inpatient hospital, home health, skilled nursing
facility, and hospice care costs. Part A was offered free of charge to those who meet the
eligibility criteria; those whom did not meet the criteria was offered coverage at a monthly
premium. Medicare Part B was to help cover costs for physician, outpatient hospital, home
health, and other services; Part B, coverage was offered at a monthly premium. Under the Part B:
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fee-for-service plan, to be covered, all services had to be medically necessary or a prescribed
preventive benefit. These services were subject to a deductible cost and coinsurance. A third part
of Medicare, Part C, known as the Medicare Advantage program, which was re- established as
the Medicare Choice program. The Medicare Advantage program expanded beneficiaries for the
choice to take part in private-sector health care plans. In 2004, the Modernization Act (MMA)
introduced Medicare Part D, to aid in paying for prescription drugs not covered by Medicare
Part A or Part B. Part D initially provided access to prescription drug discount cards, on a
voluntary basis and at limited cost, to all enrollees (except those entitled to Medicaid drug
coverage) and, for low-income beneficiaries, transitional limited financial assistance for
purchasing prescription drugs and a subsidized enrollment fee for the discount cards; this form of
the plan was phased out in 2006. Later that year, Part D was revamped to give subsidized access
to prescription drug insurance coverage on a voluntary basis, upon payment of premium, for all
beneficiaries, with premium and cost-sharing subsidies for low-income enrollees. Medicare Part
D was offered upon payment of a premium, to individuals entitled to Part A or enrolled in Part B,
with premium and cost-sharing aids for low-income enrollees. Beneficiaries could enroll in
either a standalone prescription drug plan (PDP) or an integrated Medicare Advantage plan that
proposed Part D coverage. (Klees et. al., 2009).
Scope of the Problem
According to Ketcham, Lucarelli and Powers, Medicare Part D stands for a prominent
setting where research can offer new insights to these tensions regarding inertia, choice overload,
and experience. In contrast with Medicare’s traditional design, since its beginning in 2006 Part D
has relied on enrollees to choose their prescription drug coverage from private insurers
competing within a government-created, taxpayer-subsidized market. Part D’s relevance
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to choose overload stems from the high potential for the presence of such effects given the large
number of complex products and the health and demographics of the consumers (2015, p.205).
They found that each additional plan available within $300 of an individual’s minimum cost
plan’s annual costs increases the likelihood of them switching by 0.6 percentage points (Ketcham
et. al., 2015, p.206). In Part D, the default choice for nonparticipants is to continue not to take
part. Likewise, the default for current enrollees during open enrollment is to still be in
their status quo plans for the upcoming year. Plans that are dominated on costs may be viewed as
irrelevant because their costs fall beyond the consumer’s budget constraint (Ketcham et. al.,
2015, p.207). In 2009, CMS began screening and denying insurers’ applications that offered
plans that were like plans already offered. In Medicare Part D: CMS needs plans to notify all
their existing enrollees, regardless of experience levels, of any upcoming changes in their
premiums, deductibles, or formulary coverage, including offering a list of specific drugs that will
be dropped from the formulary. Online CMS provides a “plan finder” that enables consumers’
with the skill to search and compare plans (Ketcham et. al. 2015, p. 208).
Proponent and Opponent Arguments
Mott suggested to reduce cost of medical in the United States without compromising the
quality or availability; to pass a low that makes it illegal for pharmaceutical companies to do
“direct-to-consumer” advertising on television, in magazines and by the interference of the free
market (2012, p. 125). The Former FDA commissioner, Kessler, reported that pharmaceutical
advertisements had a little educational value; it heightens awareness of the degree to which
misleading information may pervade the information marketplace (Mott, 2012, p.125). The
Committee on Bioethical Issues of the Medical Society of the State of New York also, view that
direct drug advertising does not give any benefits to patients that is harmful and costly. Leading
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to the encouragement of the U S Food and Drug Administration to review and strengthen its
policies (Mott, 2012, p. 125).
The pharmaceutical industry lobby and the pro-corporation policians in their pockets cry
foul. The pharmaceutical industry contend that prescription drug advertising serves to inform
consumers of products that end maladies that they suffer from. The NEJM study said that direct-
to-consumer advertising leads to medication overuse leading to a state of over diagnosis (Mott,
2012, p.125). Mott states “Congress should get tough and pass legislation to outlaw
pharmaceutical direct-to- consumer advertising (Mott, 2012. P. 125).
Similarly, key concerns in China are the overprescribing of antibiotics—they are
prescribed far in excess of levels recommended by the World Health Organization—and
antibiotics’ use for inappropriate purposes, such as to treat the common cold. Although the
government has issued numerous guidelines on the appropriate use of antibiotics, the guidelines’
effect has been limited. Not only is overprescription costly and inefficient, but it also has long-
term negative health effects because it produces drug resistance (Yip et. al.,2014, p.503).
Nursing’s OR Service Perspective
In the USA, on hospital care, it is also reported that prescription drugs prevent
hospitalization, and thus, lower total health care costs.. Medicare Part D brought affordable
access to prescription drugs for millions of elderly Americans. Prior to Part D, most elderly
Americans had no prescription coverage, and received drug therapy only on admission into the
hospital for inpatient care under Part A. In the nursing home, coverage of prescription drugs was
achieved through a combWith the introduction of Medicare Part D prescription drug plan and the
Patient Protection and Affordable Care Act of 2010 (PPAC), the pharmaceutical industry is re-
Running Head: PRICE 7
evaluating its strategies in accessing this market. Moreover, recent wave of mergers and
acquisitions has resulted in major restructuring of workforce in many leading pharmaceutical
companies leading to re-allocation of resources among different types of sales and marketing
strategies.ination of Medicare, Medicaid and private insurance plans. With the introduction of
Medicare Part D prescription drug plan and the Patient Protection and Affordable Care Act of 2010 (PPAC),
the pharmaceutical industry is re-evaluating its strategies in accessing this market. Moreover, recent wave of
mergers and acquisitions has resulted in major restructuring of workforce in many leading pharmaceutical
companies leading to re-allocation of resources among different types of sales and marketing strategies
(Wozniak, 2012).
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References
Ketcham, Jonathan D., Claudio Lucarelli, and Christopher A. Powers. "Paying Attention or Paying Too Much
in Medicare Part D." American Economic Review 105.1 (2015): 204-33. Web. 12 May 2017.
Mott, Frank. "Prescription for health cost reduction." Editorial. N.p., n.d. Web. 12 May 2017.
Wozniak, Laryssa, Mahmud Hassan, and Dale Benner. "Changing paradigms in the long‐term
care market." International Journal of Pharmaceutical and Healthcare Marketing 6.3 (2012):
267-78. Web. 12 May 2017.
Yip, W., Powell-Jackson, T., Chen, W., Hu, M., Fe, E., Hu, M. Hsiao, W., (2014). Capitation
combined with pay-for-performance improves antibiotic prescribing practices in rural china.
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/MedicareProgramRatesStats/Downloads/MedicareMedicaidSummaries2009.pdf
https://www.govtrack.us/congress/bills/115/hr1775/text/ih.
https://www.ssa.gov/OP_Home/ssact/title18/1860D-01.htmJournal of Health Affairs.
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