Personal Finance

With the future of Build Back Better in question, proposed Medicare changes are also in trouble

Key Points
  • Sen. Joe Manchin, D-W. Va., says he will not vote for the measure, which aims to boost the social safety net and battle climate change.
  • If a revised version is forthcoming, it's uncertain which provisions would be included and which would be cut.
  • Here are the Medicare-related proposals that could be on the chopping block.
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Medicare beneficiaries may not end up seeing improvements to the program they were hoping for — at least not anytime soon.

With Sen. Joe Manchin, D-W.Va., saying Sunday that he cannot support his party's Build Back Better Act in its current form, Medicare-related provisions in the $1.75 trillion bill also are in jeopardy. Although the House approved the bill in November, the measure would need Manchin's support to clear the Senate.

"There's not a lot of controversy among Democrats about the Medicare provisions in Build Back Better, but if there's a scaled-back version of it … then it's just a question of what Manchin wants in the package," said Juliette Cubanski, deputy director of the program on Medicare policy at the Kaiser Family Foundation.

Sen. Joe Manchin pulls support for President Biden's Build Back Better
Sen. Joe Manchin pulls support for President Biden's Build Back Better

The provisions related to Medicare include one that would allow the federal government to negotiate the price of certain drugs with pharmaceutical companies, which is intended to bring down the cost of some prescription drugs.

Price negotiations with drugmakers would start in 2025 with up to 10 drugs that year. That number would reach 20 by 2028.

Additionally, the bill would cap beneficiaries' out-of-pocket spending for Medicare's drug benefit (Part D) at $2,000 annually beginning in 2024 (with yearly adjustments) and the cost for insulin would be limited to $35 per month.

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For some of Medicare's 63.3 million beneficiaries — the majority of whom are age 65 or older  — limiting out-of-pocket drug spending could mean saving thousands of dollars per year because there currently is no cap. Roughly 1.2 million enrollees spent more than $2,000 on drugs delivered through Part D in 2019, according to research from the Kaiser Family Foundation. 

Hearing services also would be covered under Part B (outpatient care coverage) starting in 2023. This would include hearing rehabilitation and treatment services, as well as hearing aids. 

Senate Majority Leader Chuck Schumer, D-N.Y., said he plans to bring the bill, in some form, to a vote early next year despite Manchin's lack of support. It's uncertain what a revised version of the bill would look like and whether the Medicare provisions would be included.