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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning again, everyone. We'll dig deeper now on one group of items in President Biden's human infrastructure bill that seems to be getting negotiated out. Changes to Medicare, the government health insurance program for Americans over 65. Reportedly on the chopping block are giving Medicare the right to negotiate the price of medications with pharmaceutical companies. We touched on this on Friday's show and I promised you a closer look, here it is, and an expansion of Medicare benefits to cover vision care, dental care, and hearing aids, obvious sources of need for older people, but which Medicare has never included.

On President Biden CNN town hall last week, he conceded that adding those things to Medicare is a reach.

President Biden: The reason why it's a reach, it's not this-- I think it's a good idea. It's not that costly in relative terms, especially if we allow Medicare to negotiate drug prices but here's the thing. Mr. Manchin is opposed to that, as is, I think Senator Sinema is--

Anderson Cooper: Opposed to all of them?

President Biden: Opposed to all three.

Brian Lehrer: Opposed to all three, dental, vision, and hearing. President Biden on CNN with Anderson Cooper, referring to Senators Manchin and Sinema the Democrats from West Virginia and Arizona who have enough power to hold it up. Though in an intriguing development over the weekend after that CNN town hall, Senator Bernie Sanders tweeted that those things are not coming out of the bill, vision, hearing, and dental, that they are popular and still in Senators contradicting the president. Let's take a closer look with Julie Rovner, chief correspondent for Kaiser Health News and as some of you will remember a former NPR correspondent. Thanks for coming on Julie. Welcome back to WNYC.

Julie Rovner: Thanks for having me, always a pleasure to be here.

Brian Lehrer: As a historical note, why weren't glasses, hearing aids, and dental care in Medicare to begin with? Obviously, people over 65 need the costly parts of those services at a higher rate than anyone else?

Julie Rovner: Well, Medicare, when it passed in 1965, was modeled after the type of health insurance that most working Americans had and they didn't have dental, vision, or hearing coverage either. Because, frankly, in 1965, none of those things cost that much, so you didn't really need insurance for them. Obviously, Medicare has been slower to adopt extra benefits than private insurance has. Prime example, Medicare didn't get around to covering prescription drugs until 2003, many, many years, several decades after most working Americans had that coverage.

Medicare has been slow to adopt extra benefits, partly because as we're seeing extra benefits cost money, and you have to raise the money somehow and there are fights about that.

Brian Lehrer: Now, I guess we should say that some of the so-called Medicare Advantage plans do include dental, hearing, and vision. How does seniors get that today and what's the trade off there, that they're not all choosing Medicare Advantage, which is optional?

Julie Rovner: That's right. Medicare Advantage is a private program where you can opt into private insurance to cover your Medicare benefits. Medicare Advantage frequently offers extra benefit because of the complicated way it gets paid by the federal government. The big trade-off for people who choose Medicare Advantage and I should point out these days, about 40% of Medicare beneficiaries are in Medicare Advantage but the trade-off is you have to go to their network of doctors and hospitals. Some people don't want to give up their free choice of health care provider.

I think fewer people see that as a big trade-off than did when Medicare Advantage started a couple of decades ago, because most working people had a much wider choice of health care providers and now most working people have a network. The idea of going into another network plan is not quite so foreign to them. I think that's part of the reason we're seeing such an increase in the uptake of people in Medicare Advantage. One important thing to remember about Medicare Advantage is that once you go in, you can go back to traditional Medicare, but you may not be able to buy supplemental insurance to go with that Medicare, which would leave you exposed to really big out of pocket costs.

It's a quirk. This is something that Congress has been trying to fix for more than a decade and has not yet.

Brian Lehrer: You mean, if you're in and I don't want to go too far down this rabbit hole because it's not about what's in Biden's bill but if you're on a Medicare Advantage plan to increase the number of benefits that you get, and you decide you don't like it anymore, and you want to go back into traditional Medicare, you're not allowed to buy supplemental insurance on your own as an individual in the marketplace to fill some of those gaps?

Julie Rovner: You're allowed to, but they don't have to sell it to you in many states if you have pre-existing conditions. If you have pre-existing conditions, the only open enrollment, you get to buy your own Medicare supplementals when you first become eligible for Medicare.

Brian Lehrer: Interesting. Now, you're a health reporter, not a political reporter but do you have any independent knowledge of whether President Biden was right when he suggested those things are too much of a reach to get included in the bill, or whether Senator Sanders was right, that they're still in?

Julie Rovner: Well, I'm a political reporter, too and I've covered a lot of these big negotiations on Capitol Hill and what I can tell you is that nothing is in or out until there's a final deal and as far as we know, there's no final deal yet. They could both be right. It's possible that it was out when the President said it was and it was back in when Senator Sanders said it was and it could be in or out now. I think what's most likely is that where the Democrats seem to be going is they're trying to scale things down to include as much as they can, but perhaps only temporarily for some of these things.

Brian Lehrer: Or maybe a scale that version, like I saw on TV over the weekend that something called dental vouchers might be in and that wouldn't be full dental coverage, like people may think in their robust private insurance plans for dental care, but an $800 or something like that per year dental voucher. Then you could say, "Yes, dental is still in," but it's not in that much.

Julie Rovner: That's right. Of course, one of the problems that even the way the bill was originally written, the dental wasn't going to start full until 2028 anyway, so it was going to be quite a while before people actually realized this benefit. The vouchers were thought of as a way to give people something to tide them over. That something may be the only thing, again, all still under discussion. A lot of it depends on what we're here to talk about, which is how much they managed to save on prescription drugs.

Brian Lehrer: That's right, which we'll get to in one second. I have a theory that Biden may have been playing three-dimensional chess in that CNN clip by naming Senator Joe Manchin and Senator Kyrsten Sinema, as opposing all three of those items. Maybe as a healthcare political analyst, you have a take on this but I wonder if it's really politically popular to tell seniors in your state in West Virginia and Arizona, that you're the one who blocked tax hikes on millionaires and billionaires rather than pay for those basic health care needs?

Julie Rovner: Oh, I think he was definitely. I think I tweeted this as that town hall was going on, he's negotiating on television. One of the things that's really important about all of these Medicare benefits is that they're really popular with the public and he did want to point his finger at the senators saying, "Every other Democrat wants to do this and these people are the ones that are standing in the way," probably in hopes of getting people in West Virginia and Arizona to start calling or writing or emailing their senators.

Brian Lehrer: Julie Rovner from Kaiser Health News with us here on WNYC as we talk about Medicare aspects being negotiated in or out of the bill back better bill, the human infrastructure bill, let's talk about the idea of Medicare negotiating price with pharmaceutical companies. How does Medicare get charged now?

Julie Rovner: Well, right now, much like Medicare Advantage, the Medicare prescription drug plans are private and you sign up for them separately, and it's complicated if you sign up for Medicare Advantage, your drugs will be delivered that way but if you have regular Medicare, you sign up separately for a drug plan. Those plans negotiate the prices. What the Congressional Budget Office said at the time this was passed in 2003, is they didn't think that Medicare would do any better job at negotiating drug prices than the prescription drug managers who negotiate prices now, for people with private insurance and people with Medicare insurance.

Over the years as prescription drug prices have gone up, the prescription drug price negotiation has come to mean other things too including something of a cap on how much those prices can be based on how much they are in other countries, and also how much they can raise those prices from year to year, that would lower prescription drug prices and coincidentally save a lot of money for the federal government, which they could spend back on things like expanded Medicare benefits.

Brian Lehrer: What does the VA do, the Veterans Administration, the other big government medical coverage system?

Julie Rovner: The VA has what a lot of private plans have which is basically a formulary. The VA is able to negotiate the prices of drugs and of course, the trade-off here because there's always trade-offs in healthcare, is that they don't cover every drug. They cover the drugs that they can get the best deals on. There are people in the VA who get VA healthcare who are not happy because they can't always get the drug that they want or that their doctor has prescribed. That's been a concern about Medicare too, although the way the Medicare provision has been written, first of all, it would only be a small number of drugs they would negotiate the prices on, again, as I say there would be caps on how much the drug makers could charge for the drug. It's not just a straight negotiation.

Brian Lehrer: You mentioned the F-word formulary and the Group Pharma, which represents the pharmaceutical industry is running TV commercials right now. They claim, if Medicare gets the right to negotiate price, the government will tell you that you can't take certain drugs that you're currently taking, or that people couldn't get as many different medications at all in the future as are available now, because they would establish for the first time a formulary, a list of drugs that they cover, and those that they don't. Can you fact-check the velocity of that claim?

Julie Rovner: Yes. Well, first of all, this is the claim that the drug makers have been making a go. I started covering this in 1986 when Congress first tried to add prescription drug coverage to Medicare, and they did briefly, and then they repealed it. The drug makers have been making exactly the same argument that you won't be able to get the drugs you need. That if we can't charge as much as we possibly want to, we won't have enough money to invent the next generation of new drugs. It is not a changed argument.

At its base, there is a little bit of validity to it. Obviously, it's not the tobacco industry. We need the drug industry. We need the drug industry to be innovative. It's expensive to develop drugs and it's a big risk, a lot of drugs don't pan out. On the other hand, the United States consumers pay more for prescription drugs than anyone else in the world, because we're basically the only industrialized country that does not somehow limit the price of prescription drugs. The US is basically the only place that the prescription drug industry can charge as much as it wants.

Brian Lehrer: Would there be a formulary? Is there anything in the human infrastructure bill that would prevent the creation of a formulary with the limits on which drugs are available that the pharma industry says will come about?

Julie Rovner: Certainly not in the language that we've seen, there would not be a strict formulary. That's not the main way it would limit prices. It would limit prices the way Medicare limits every other medical price. It would say you can only charge this much, and that's all that we're going to reimburse for. The drug industry is much more worried about price setting, I think than they are about formularies. Yes, I think formularies worry people. Well, you know what, and there was a big fight about formularies when the Medicare part D program was created in the early 2000s.

In certain classes of drugs, they have to offer every drug, in some classes of drugs they don't. It's always going to be balancing, but yes, that's going to be the prescription drug industry's argument all the time, is if there are any kinds of limits, you might not be able to get the drug that you and your doctor want.

Brian Lehrer: Listeners, we can take your calls with questions or comments on the Medicare aspects of the human infrastructure bill, including dental, vision, and hearing benefits and Medicare's potential ability to negotiate price with pharmaceutical companies. Again, if you're just joining us today for the first time since the pandemic began, we can return to our usual call-in number, which is 212-433, WNYC 212-433-9692. It's easier to remember than our alternative call-in number, because it has 212 in it for one thing and it has WNYC in it for another.

212-433 WNYC because of pandemic related technical challenges that we won't bore you with, we had to go to a different phone bank since March of last year, but a welcome sign of normality. Our usual call the numbers back. It's 212-433 WNYC, 433-9692 for Julie Rovner, chief correspondent for Kaiser Health News. Of course, you can always tweet at our same Twitter address at Brian Lehrer, if you want to tweet your question, we'll watch our Twitter go by. Julie, let me dig into something that you brought up a couple of times already. It's only fairly recently in the history of Medicare, that there's a prescription drug benefit at all, isn't it?

Julie Rovner: That's correct. There was briefly a prescription drug benefit, or at least there was a prescription drug benefit passed by Congress in the late 1980s in 1988. It was repealed in 1989, because it was going to be financed by a surtax on wealthy seniors and those wealthy seniors rebelled and for a whole lot of complicated reasons, Congress backed off, repealed the entire thing. It's one of the reasons why you can be exposed to so much other cost in Medicare because it was going to create a catastrophic out of pocket cap that also still does not exist.

That's why when you're on Medicare, you pretty much need to have either a supplemental plan of your own or a Medicare Advantage plan, otherwise you can be exposed to very high ongoing costs even with Medicare coverage. Again, this was a big fight. The drug industry fought it. There was a lot of pushback when Obamacare was going through in 2009, because the Obama administration basically cut a deal with the drug industry. I think it's fair to say that if they had not cut that deal with the drug industry, there would have been no Affordable Care Act. The drug industry was and is an extremely powerful lobby in Washington, DC.

Brian Lehrer: If Medicare can negotiate price, would seniors pay less out of pocket, or would just the taxpayers pay less to have the government buy the drugs from the pharmaceutical companies?

Julie Rovner: Well, the goal here is obviously for seniors to pay less and for the taxpayers to pay less, that's what the drug industry is most worried about. That these savings would be passed through. This is one of the current problems with the way drug prices are negotiated. Now, even within Medicare part D plans is that those savings don't always get to the end-users. Sometimes they get passed around through middlemen and the drug companies give discounts and the discounts never show up at the pharmacy counter.

That's obviously something that Congress wants to address, but it's really important when we're talking about these drug price plans. Some of them only deal with 50 or 100 different drugs. It's not every drug. There's still debate about whether it will only be drugs through Medicare or drugs that some of these price constrictions might extend to the private sector. Whether that's even allowed under the budget rules that they're operating under, that lets them pass this bill with only Democratic votes. Then of course, how they're going to get basically all the Democrats on board, which they don't have yet as of this moment.

Brian Lehrer: Jim in Litchfield you're on WNYC with Julie Rovner, from Kaiser Health News. Hi Jim.

Jim: Hi. I was listening to what she was saying earlier about the formularies and the like under Medicare. She was leaving the impression that whatever prescription medicine that you want to go, that your doctor wanted you to have would be available to you. Well, I'm on Medicare. I've had a lot of experience with that and what she was suggesting really just isn't true.

There've been a number of prescription drugs that my doctor has prescribed for me and I can take that prescription to the drug store and they are perfectly happy to sell it to me, but they'll say, "Well, your drug plan won't cover it, so we were going to charge hundreds of dollars instead of, the 10 or 15 that you might otherwise pay." This notion that somehow under Medicare you're going to have every drug available to you, I think just isn't true.

It's certainly not true now. Then there's a second point that I wanted to make about negotiating drug prices under Medicare. As I understand it, and I haven't been able to verify this by being able to track down the actual text of the statute, but the way I understand, the negotiation provision works, pardon me, is that there'll be a negotiation process that the drug company would go through with Medicare, but if they don't reach a negotiated price, the government can then impose an excise tax on all the revenues from that particular drug.

That may be as much as, 95% of all the revenue. Well, that's not really a negotiation. That's how you negotiate with the mob. They put a gun to your head and say, do you agree and so, of course, you agree. [crosstalk]

Brian Lehrer: Jim, you bought a few things on the table here, let's get them addressed. Julie, to his first point, that the status quo is not that a person on Medicare can get any prescription drug that their doctor wants to prescribe. Is that true?

Julie Rovner: In some cases it's true. In some cases, it's not. For some classes of drugs, plans have to cover all of the drugs in that class. For some, they only have to cover two drugs in that class. Medicare has a useful, but still complicated tool. The Medicare website I get this from my mom for several years where you can plug in all of your drugs and how much you take of them and they'll tell you which one are covered and how much you'll pay. You can figure out which plan covers the majority of your drugs and will save you the most money compared to the premium. Yes, there are formularies. In most cases they're more like tier, so they'll be preferred drugs and then less preferred drugs.

It's rare to find a drug that's simply not covered, more that you'll just have to pay higher out of pocket costs for it. That's true in Medicare part D as well as in most private insurance plans. Now you have different tiers of coverage depending on whether the plan is preferred and the drug is preferred.

Brian Lehrer: His argument is that it's overstated that you can get anything on Medicare now, and that you might be more limited once they start negotiating price, because you're limited now.

Julie Rovner: You are limited now. Their argument is that you'll be more limited if they're-- The question is whether or not Medicare is allowed to say no. I think the caller is absolutely correct. What the Congressional Budget Office had said is that if Medicare just has negotiating power, but they're not allowed to say no, they have to come up with some amount of money that they will pay for the drug, that the drug companies will have too much leverage.

If Medicare gets to say no, then the drug won't be offered or as the caller described correctly, there could be this excise tax. That's why I was saying earlier, there's a point at which Medicare simply is setting prices for drugs. They're setting caps on prices for drugs as they do for every other health benefit, every other health service that Medicare covers. It wouldn't be that different, but it's something that the drug industry has never had to contend with.

Brian Lehrer: Jim, thank you for starting that thread of conversation. Let's finish it with the comparison. We're talking about Medicare and prescription drugs like that world exists in a bubble, what about the price that Medicare pays for every other health procedure or item or anything else that it provides for their recipients? They do negotiate price today.

Julie Rovner: They set prices. There are some negotiations, but Medicare mostly saves money by being a price setting entity and that's what the drug industry is afraid of. That's why the drug industry fought the original inclusion of a prescription drugs or out-patient prescription drugs.

Medicare has always covered inpatient prescription drugs, which is its own separate discussion because those are the ones that are really expensive things like cancer drugs, but Medicare didn't want to have outpatient drugs covered because they knew eventually Medicare would want to pay for those drugs the same way they pay for every other service which is by setting a maximum price.

Brian Lehrer: Is Medicare losing doctors from those who will accept Medicare patients because their reimbursements are too low?

Julie Rovner: This is an ongoing debate. Generally, every time I've looked at the numbers, there's still a robust number of doctors that take Medicare. Most doctors can't afford to not take Medicare. There are some that don't. There are some places where it's hard to find a doctor because it's hard to find a doctor, even if you're not in Medicare. Finding a doctor in Medicare is not nearly as difficult as it can be finding a doctor in Medicaid because Medicaid does pay so much less in most states than private insurance or Medicare.

Brian Lehrer: Medicaid being the government insurance program for low-income people. Gail in Queens, you're on WNYC. Hi Gail?

Gail: Good morning. I have so much that I could say about all of this because I am a senior. I do take drugs provided through Medicare, but the reason that I called and the reason that I'm on the line is that I have a question which is, why would a legislator be opposed to having Medicare negotiate lower drug prices for the end-user? Why would they oppose that because it doesn't cost the treasury anything? Why would they be opposed?

Brian Lehrer: Gail, that's a great question. Let me name some names here, Julie. Democratic Senator Kyrsten Sinema of Arizona is the one most holding this up we are told along with, in the house Democratic Congresswoman Kathleen Rice of Long Island. Can you explain their objections and to Gail's point why they would be opposed to this? Why this would be to their political advantage in their districts?

Julie Rovner: Because many of the people who are opposing this are from districts with significant drug company presence. Senator Menendez from New Jersey is also one of the holdouts here. New Jersey, obviously as your listeners know, a big pharmaceutical state. These are representatives that are representing the, and it's not just the drug industry, the executives, their constituents are people who work for these drug companies and are concerned about the viability of their jobs and careers.

It's this continuing argument about what it would mean to the drug industry if there were significant price limitations. We don't know what the exact specifics are of what they're talking about. The drug industry is obviously if anybody's turned on a television can tell fighting this tooth and nail.

Brian Lehrer: Most of our listeners probably assume that senators like Sinema and Menendez and Congress people like, Kathleen Rice, are simply being bought off by campaign donations, by big pharma. Maybe you can understand it in Menendez case because the pharmaceutical industry is a major employer in New Jersey, but is it in Arizona? Is it in Nassau County on Long Island?

Julie Rovner: It isn't so much in Arizona. One of the other members of Congress is holding this up is from a large biotech district around San Diego. It's not just pharmaceuticals, there are a lot of these smaller drug companies that are working on these high-tech things. There is present in a lot of places and you get to use your own judgment about, are they being bought off by the pharmaceutical industry or are they representing their constituents?

Brian Lehrer: Well, there we will leave it. Our deeper dive into the Medicare portions of president Biden's human infrastructure bill, some of the history around things that are, and aren't included in Medicare and some of the politics in the debate right now does seem like we're going to see how this bill comes out in the coming days. Now we know more about it. Thanks to Julie Rovner, chief correspondent for Kaiser Health News, which obviously does cover health. Julie, thank you so much.

Julie Rovner: Thank you.

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