We’re nearly 50 days out from the 2018 midterm elections. While there are many (MANY) unknowns that will undoubtedly affect the outcome of those elections, one trend has become clear: voters want action on healthcare.

Congress has an uneven record on this front, having taken some positive actions while also failing to fulfill its promise to repeal the Affordable Care Act and restore choice and competition to the market.

However, one fix that they can easily implement now is to remedy the changes they made to Medicare Part D in February’s Bipartisan Budget Act (BBA).

Medicare Part D relies upon private parties – insurers, PBMs, drug manufacturers and others – to negotiate with one another within defined parameters to provide coverage of prescriptions for enrollees.

The program’s structure uses these parties’ natural interests to ensure that they negotiate against one another and offer plans with the most savings, ideally attracting the largest number of enrollees. The concept is simple enough, using proven, free market incentives to ensure competition generates greater savings and choice for enrollees.

It’s why Medicare Part D has consistently exceeded expectations, costing 45 percent less than the originally estimated cost and keeping premiums low year after year.

This is why it is baffling that Congress recklessly tinkered with the program.

Congress made changes to what’s known as the “Donut Hole.” The donut hole is a portion of the program in which a patient’s costs have exceeded a set, cost threshold and the enrollee is liable for greater out-of-pocket costs.

For patients with even more expensive care, their costs will exceed even the donut hole and they will enter into catastrophic coverage, in which the federal government, insurers and drug manufactures split the cost of their prescriptions through a prearranged cost-sharing arrangement.

Congress acted to “close the donut hole,” eliminating the phase in which patients would pay the most for their care.

While admirable, they did so at the expense of the program’s overall, competitive structure.

When closing the donut hole, Congress altered the cost-sharing formula in catastrophic coverage, essentially removing insurers’ liability and increasing the discounts that drug manufacturers must provide to patients.

These changes are complicated, dealing with both beneficiary rebates, out-of-pocket expenses and coinsurance rates.

However, a clear analysis from American Action Forum’s policy analyst Tara O’Neill Hayes lays out the changes in a cohesive picture, showing how the change has two overarching effects that create a perverse incentive for insurers to move patients into catastrophic coverage and will raise prices for the program overall:

“By reducing the insurers’ liability in the coverage gap down to only 5 percent, insurers will save nearly $700 for each high-cost enrollee and an estimated $2.4 billion for all beneficiaries in the coverage gap…this liability reduction could reduce the incentive for insurers to control drug costs beyond the initial coverage limit—a move that would undermine the market-oriented structures that have made the Part D program so successful.”

In short: insurers no longer have an incentive to keep costs low, as the more a patient’s prescriptions cost the more likely it is that the insurer will not have to pay for a significant portion of them.

CASE was proud to join a coalition of ten, free market organizations in urging Speaker Paul Ryan (R-WI) to undue these damaging changes. As we stated in our letter,

“The potential loss of robust private sector competition in Part D could lead to higher premiums and out-of-pocket costs over time. It could endanger access to medicines, many of which actually reduce net long-term Medicare costs by preventing expensive hospital stays, surgeries, and other therapies.”

Medicare Part D is a successful program which has helped tens of millions of Americans to afford the prescriptions that they need.

This change threatens that lofty, overarching goal by potentially increasing costs to the point that fewer and fewer enrollees can afford the care they need.

Congress can undue this change at any time – and they should. And, as voters across the country contemplate their November ballots, we’d recommend that they do so soon.