trending Market Intelligence /marketintelligence/en/news-insights/trending/JpLVj3aW3SaUGChjaCkPFw2 content esgSubNav
In This List

Trump order promotes Medicare plans, faster drug payments, but not lower prices


S&P Capital IQ Pro | Powering Your Edge


S&P Capital IQ Pro | Unrivaled Sector Coverage


Enterprises are missing out on 24B by not optimizing cloud spending not going multicloud


Investment Research Analysts Providing Greater Coverage on Inflation

Trump order promotes Medicare plans, faster drug payments, but not lower prices

President Donald Trump is ordering his administration to take new actions to boost access to Medicare and speed the payment of drugs covered by the program, but his directive is not calling for any new efforts to lower the costs of medicines.

SNL ImagePresident Donald Trump
Source: AP Photo

The Oct. 3 executive order seeks to drive Medicare beneficiaries toward purchasing private insurance plans — Medicare Advantage — over getting their health coverage under the government's traditional program for seniors and Americans with disabilities.

Trump is using his new executive order to take aim at the Medicare for All single-payer proposals offered by presidential candidates Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., and a similar plan from Reps. Pramila Jayapal, D-Wash., and Debbie Dingell, D-Mich.

Another plan from Sen. Kamala Harris, D-Calif., also a presidential contender, would allow private insurers to offer Medicare plans within the federally run system, like Medicare Advantage.

Two other presidential candidates, former Vice President Joe Biden and South Bend, Ind., Mayor Pete Buttigieg, have proposed plans that would let Americans buy into the Medicare program.

Donald Berwick, who was former President Barack Obama's first head of the Centers for Medicare and Medicaid Services, said Medicare for All is not about providing healthcare but about paying for it.

"Medicare for All changes how we pay for care, it does not change who provides care," Berwick told the House Ways and Means Committee at a June 12 hearing.

But during an Oct. 3 background briefing, Trump's CMS chief, Seema Verma, said allowing all Americans to be covered by a single-payer system would diminish Medicare, delay care and make the program's beneficiaries "second-class" citizens — an argument a number of public policy experts have pushed back against.

Under Trump's order, the U.S. Department of Health and Human Services would be expected to formulate a plan to allow the Medicare program to provide beneficiaries with more private plan choices at lower costs, officials told reporters.

The directive also promotes greater use and coverage of telehealth services.

SNL ImageCMS Administrator Seema Verma
Source: AP Photo

In addition, it seeks to ensure providers are better reimbursed for their services, while also seeking to rein in costs, officials said.

Under Trump's order, the administration is directed to explore new ways to cut down on waste, fraud and abuse of the Medicare system.

Officials said the order is evidence Trump is a defender of Medicare, but his fiscal 2020 budget request to Congress called for reducing spending on the federal program by $845 billion over 10 years — an idea lawmakers have ignored.

No efforts to lower drug prices

While Trump's directive calls for CMS to adopt new rules and guidelines for minimizing the time it takes to make coverage decisions for newly approved medicines, it does not tell his administration to take any actions that would lower drug prices.

On July 5, he said would sign a "favored nations" executive order that would require drugmakers to offer the U.S. government the lowest prices paid by other developed nations for prescription medicines.

The order also does not take any steps to further the administration's ideas for importing prescription medicines into the U.S. — primarily from Canada — as a way to lower Americans' drug costs.

Florida has submitted its proposal to HHS for importing drugs, but the agency has yet to formalize any rules or regulations that would allow the state to proceed with its plan.

No ACA replacement

Trump's order also does not take any actions to replace the Affordable Care Act, should it be overturned by the U.S. Supreme Court. A decision from the U.S. Court of Appeals for the 5th Circuit is pending on whether to uphold a Texas judge's December 2018 ruling that the ACA is unconstitutional — an action that could leave millions of Americans without healthcare coverage.

Officials insisted Trump would ensure preexisting conditions are protected, but he has yet to offer a plan that would ensure that those safeguards, which are provided under the ACA, remain in place.