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Tag: Medicare

  • Does Medicare cover rehab for drug and alcohol addiction? Yes, and here’s exactly what it will pay for

    Does Medicare cover rehab for drug and alcohol addiction? Yes, and here’s exactly what it will pay for

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    Substance abuse, especially of alcohol and prescription drugs, for adults 60 and over is a fast-growing health problem in the U.S.

    According to the 2022 National Survey on Drug Use and Health (NSDUH), in 2022, about 4 million people aged 65 or older (or 7%) had a substance use disorder (SUD) in the past year, including 2.3 million who had an alcohol use disorder (AUD) and 1.8 million who had a drug use disorder (DUD).

    Older adults often feel ashamed about substance abuse and are reluctant to seek help. But help is available through Medicare coverage.

    What Medicare covers for rehab

    “Medicare pays for the treatment of alcoholism and substance use disorders in both inpatient and outpatient settings, when medically necessary,” says Meredith Freed, Senior Policy Analyst for Medicare Policy at KFF.

    Medicare Part A covers inpatient substance abuse treatment. Medicare Part B covers outpatient substance abuse treatment from a hospital outpatient department or clinic.

    Expenses covered for the treatment of alcoholism and substance use disorders include:

    • Therapy
    • Patient education
    • Follow-up after hospitalization
    • Prescription drugs through Medicare Part D (outpatient)
    • Prescription drugs, including Methadone (inpatient)
    • Structured Assessment and Brief Intervention (SBIRT)

    Without a diagnosis of SUD, but if you are showing early signs of substance abuse or dependency, you may qualify for SBRIT, which is an outpatient early intervention process with these three parts: 

    • A screening assessment for risky substance use behaviors
    • A brief intervention with a patient who shows risky substance use
    • A referral for therapy or additional treatment 

    If you need inpatient treatment at a hospital or treatment facility, you will pay the standard deductible for each inpatient hospitalization, which, in 2024, is $1,632. After that, “Medicare covers expenses up to 60 days, then beneficiaries pay a $400 copayment per day for days 61-90 and $800 per day up to the lifetime reserve days available,” says Freed. For inpatient stays in a psychiatric hospital (instead of a general hospital), Medicare coverage is limited to up to 190 days of hospital services in a lifetime.

    Medicare Advantage coverage for rehab

    Medicare Advantage (MA) plans are required to offer at least the same coverage as traditional Medicare plans.

    However, according to Freed, the deductible and copay amounts (see above) are for people in traditional Medicare. MA plans have the flexibility to modify cost sharing for most Part A and B services, subject to some limitations. So if you’re in an MA plan, your cost-sharing requirements may look different. For example, MA plans often charge daily copayments for inpatient hospital stays.

    Here are some additional examples of cost savings tools MA plans use:

    • Prior authorization requirements. According to KFF analysis, almost all MA enrollees (98%) in 2022 were in plans that required prior authorization for some mental health and substance use disorder services.
    • Coverage only for in-network providers. In 2022, roughly 60% of MA plan participants had plans that did not cover out-of-network outpatient mental health and substance use disorder services.
    • Referral requirements. About a quarter (26%) of MA participants were in plans requiring referrals for some mental health and substance use disorder services in 2022.

    Medigap and Medicaid coverage for rehab

    If you have supplemental Medicare insurance (such as Medigap) in addition to your traditional Medicare, you can typically get coverage for deductibles and other addiction treatment expenses not covered under basic Medicare.

    Medicaid coverage varies by state. Check with your Medicaid state agencies for more information.

    More help for substance use disorder in 2024

    One of the biggest challenges in receiving support for mental health challenges such as substance use disorder is the scarcity of mental health providers. Recently passed Congressional action that goes into effect in 2024 may help.

    CMS announced that over 400,000 marriage and family therapists and mental health counselors can provide services to people on Medicare and get paid directly. Previously they had to be supervised by a billing physician, says Freed.

    CMS also put forth a new requirement that MA plans include an “adequate number of outpatient behavioral health facilities” in their provider networks for therapy and substance use disorder treatment.

    Congress and CMS also made progress on closing the gap between inpatient and outpatient SUD treatment, to take effect in 2024.

    Previously, Medicare offered a partial hospitalization benefit (PHP), for patients who need at least 20 hours of therapy and other mental health and substance use disorder services in a week instead of requiring inpatient hospitalization.

    “In 2024, Medicare beneficiaries will have access to a new program—intensive outpatient (IOP) services,” says Freed. As an alternative to hospitalization, patients can receive 9-20 hours of outpatient SUD services in a larger variety of settings, including hospital outpatient departments, community mental health centers, federally qualified health centers, rural health clinics, and opioid treatment programs (OTPs). Previously, these services were only available for people who needed 20 or more hours of services, which could only be provided in hospital outpatient departments and community mental health centers.

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    Margie Zable Fisher

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  • Long travel distances, excessive wait times, doctor shortages—Medicare beneficiaries face hurdles to see neurologists

    Long travel distances, excessive wait times, doctor shortages—Medicare beneficiaries face hurdles to see neurologists

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    According to a study published recently in Neurology, the medical journal of the American Academy of Neurology (AAN), almost one in five people on Medicare travel 50 or more miles one way to see a neurologist. Patients who require specialized neurologic care for diseases including brain cancer, amyotrophic lateral sclerosis (ALS), and multiple sclerosis (MS), travel long distances the most often.

    Neurologists are doctors who specialize in diagnosing and treating diseases of the brain and the central nervous system. Since our brains and nervous system are part of the normal aging process, neurological issues are more common as we get older. In fact, according to a review of studies, aging is the main risk factor for most neurodegenerative diseases, including Alzheimer’s disease (AD) and Parkinson’s disease (PD). The findings also showed that 10% of people aged 65 years or older have AD, and it becomes more common with increasing age.

    The prevalence of neurological and nervous system issues in people 65 and older makes the need for better neurological options for Medicare patients even more important.

    “Our study found a substantial travel burden exists for some people with neurologic conditions, including people living in areas with fewer neurologists and rural areas,” said study author and chair of the American Academy of Neurology’s Health Services Research Subcommittee Dr. Brian C. Callaghan, of the University of Michigan Health in Ann Arbor, said in a news release. “We also found that people who traveled long distances were less likely to return for a follow‐up visit with a neurologist.”

    The wide-ranging study included over 563,000 participants on Medicare, at an average age of 70, who saw a neurologist at least once during the one-year study. For the study, 14,439 neurologists provided care to participants in over 1.2 million office visits.

    The findings showed that more than 96,000 people, or 17%, traveled long distances (defined as 50 or more miles each way), with an average of 81 miles each way and an average travel time of 90 minutes. Those who traveled long distances had a 26% decreased chance of a follow-up visit compared to those without long-distance travel.

    “Our results suggest that policymakers should investigate feasible and affordable ways to improve necessary access to neurologic care, especially in areas with low availability of neurologists and in rural communities,” said study author Chun Chieh Lin, Ph.D., MBA, of Ohio State University in Columbus and a member of the American Academy of Neurology. “Interventions such as telemedicine can improve access to care. Future research should examine the differences in health outcomes between people who must travel long distances for care and those who do not.”

    An increase in telehealth for neurological services

    This study was conducted in 2018, prior to the COVID-19 pandemic, and Lin suggested that future studies examine how telemedicine during the pandemic impacted travel times.

    The pandemic did lead to an increased use of telemedicine services for neurologists. In fact, without any other options than virtual care, neurologists determined that 21 of the 23 elements of the single-element neurological examination could be done through telehealth, according to the American Medical Association.

    One was the cardiovascular part of the exam since there is not a remote stethoscope of fingers to feel pulses. The second was the ophthalmoscopic examination, as there is not a remote ophthalmoscope, according to Dr. Neil Busis, associate chair of technology and innovation in the neurology department at New York University Langone Health.

    The most recent telehealth survey conducted by the American Medical Association showed that the pandemic had indeed led to increased use of telemedicine by neurologists. The survey showed that, per week, on average, neurologists saw 36% of their patients via telehealth. However, at least 75% of telemedicine visits were with established patients, suggesting that most patients still see neurologists in person for the initial visit.

    The national shortage of neurologists

    The critical neurologist shortage affects the travel times for Medicare patients, as well as the standard of care.

    While the nationwide physician shortage is affecting all specialties, the demand for neurologists is growing even faster due to several factors. One is the medical advances in treating neurological disorders including migraines, multiple sclerosis, and epilepsy. Another is the growing population of Americans over the age of 65. Estimates show that over the next 7 to 27 years, cases of Parkinson’s and dementia will double, and strokes are expected to increase by 20%.

    An April 2023 study suggested that the current estimated 11% shortfall of neurologists will increase to 19% by 2025, resulting in longer wait times.

    According to a news release from the American Academy of Neurology, undervalued in-person neurologist visits by the Medicare system are one of the reasons there is a shortage of neurologists. “Without fair and stable reimbursement, medical students and residents who have substantial education debt often are forced to seek more financially rewarding specialties than neurology.”

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    Margie Zable Fisher

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  • PolitiFact – Does Gov. Ron DeSantis want to cut Social Security and Medicare? Here’s what his record shows

    PolitiFact – Does Gov. Ron DeSantis want to cut Social Security and Medicare? Here’s what his record shows

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    A Spanish-language ad playing on South Florida radio stations portrays a phone conversation between a daughter and a mother who are lamenting Florida’s high costs of living. 

    The mom says, “Now your father wants to retire, but we don’t know if he’ll have Social Security.” The daughter asks why.

    “The governor, Ron DeSantis, is the reason our costs are going up and he’s doing nothing about it. He even wants to cut Social Security and Medicare,” the mom says. “And now he wants to become president.”

    The ad began airing Nov. 8 and comes from DeSantis Watch, a project of the left-leaning research organizations Progress Florida and Florida Watch.

    Social Security is a source of monthly income for older Americans who are retired or have reduced their working hours. Most jobs take Social Security taxes out of workers’ paychecks so that the workers can get monthly benefits later in life. 

    Medicare is a federal health insurance program for people age 65 and older and for certain younger people with disabilities. There are different parts of Medicare; original Medicare pays for doctor’s visits and hospital stays (beneficiaries generally have copays). Medicare Advantage is a Medicare-approved plan offered by private companies as an alternative to original Medicare for health and drug coverage.

    PolitiFact checked DeSantis’ congressional record, his comments as governor and and his comments as he seeks the 2024 Republican presidential nomination. The ad contains an element of truth, but ignores critical facts.

    As a U.S. representative before becoming governor, DeSantis supported congressional proposals to reduce Social Security and Medicare spending, including by raising the age for full eligibility. But those proposals were symbolic statements of a policy preference; even if passed, the proposals would not have become law.

    As a governor and presidential candidate, DeSantis has said he’s open to changing Social Security rules for younger generations, but he’s said he would not change it for current beneficiaries. His current stance on Medicare is not clear.

    DeSantis’ congressional record

    Anders Croy, Florida Watch and DeSantis Watch’s communications director, directed PolitiFact to DeSantis’ congressional votes in 2013, 2014 and 2015 for three nonbinding budget proposals. These resolutions called for raising the retirement age and slowing future Social Security spending. The House didn’t pass the proposals, but even if it had, they would not have become law. 

    Croy also noted that in 2017, DeSantis voted for another nonbinding budget resolution, a motion that does not enact a law, that proposed cutting $473 billion to Medicare’s baseline spending over a decade. This provision also needed the approval of additional laws to take effect.

    Whether those measures amounted to cuts to the programs is debatable. 

    Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, told PolitiFact in 2018 that whether these resolutions would have led to cuts hinged on the particulars of other proposals that would have to eventually become law. 

    What’s DeSantis’ current stance on Social Security and Medicare?

    The ad says DeSantis “wants” to cut Social Security and Medicare, giving the impression this is his stance as he runs for president. 

    Although DeSantis has said in interviews and public appearances that the Social Security program needs changes, he has also said he supports keeping it as is for current beneficiaries. He has said he is open to changing eligibility requirements for younger Americans currently in their 30s and 40s.

    “When people say that we’re going to somehow cut seniors, that is totally not true,” DeSantis said in July on Fox News. “Talking about making changes for people in their 30s or 40s so that the program’s viable, that’s a much different thing.”

    Changes to Social Security, such as raising the retirement age, would most likely mean benefit cuts, said Andrew D. Eschtruth, an associate director at Boston College’s Center for Retirement Research. 

    If people are promised benefits at a specific age and then, when they become eligible to receive them, the age requirement increases, those people lose the benefits for that expected period, he said.

    DeSantis has not specified if or how he would change Medicare.

    Our ruling

    A DeSantis Watch ad claims that DeSantis “wants to cut Social Security and Medicare.”

    As a presidential candidate, DeSantis has not said what he wants to do with Medicare. He has said he favors changing Social Security, although not in a way that affects current beneficiaries. 

    In Congress, DeSantis supported proposals to reduce Social Security and Medicare spending, including raising the age at which people are fully eligible. This could mean people who thought they would be receiving benefits at a certain age end up waiting longer. Whether that is considered a “cut” is debatable, and those measures were nonbinding, which meant they were motions that didn’t enact a law. 

    The ad comes as DeSantis runs for president and can give the misleading impression that he’s campaigning on a platform to make broad cuts to Medicare and Social Security.

    We rate this claim Mostly False.

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  • Nationwide Medicare program that aims to improve health care, fails to deliver any mental health benefits, new study finds

    Nationwide Medicare program that aims to improve health care, fails to deliver any mental health benefits, new study finds

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    Accountable care, the fast-growing nationwide Medicare program with a goal of improving health care while reducing costs, resulted in no improvements in mental health care, according to a study released earlier this month.

    The study found that patients who were not initially enrolled in an accountable care organization and switched to one were no more likely to get mental health treatment and had no improvements in their symptoms after a year compared to those in regular Medicare.

    “Overall, accountable care organizations had no effect on the quality of mental health care: All the outcome measures were zero except for one treatment measure for depression, which was actually worse,” said study senior author Kenton Johnston, Ph.D., an associate professor of medicine at Washington University, in a news release about the study.

    What are Accountable Care Organizations?

    Accountable Care Organizations (ACOs) were created as part of the Affordable Care Act. The goal was to create a new type of structure that agreed to be held accountable on 33 measures of quality and experience of care while reducing the costs of care. If those results were achieved, an ACO would share in the savings to Medicare. Based on the study’s findings by researchers at Washington University School of Medicine in St. Louis and the Yale School of Public Health, the current structure of the program is not improving mental health care.

    “Accountable care organizations are the most important payment and care model in Medicare right now and they do not appear to have improved mental health treatment for the two most prevalent mental health conditions in our society, which are depression and anxiety disorders,” said Johnston. “In this study, only about half the people with depression or anxiety got any outpatient mental health care at all—and those in accountable care organizations got even less. People are supposed to get treatment for depression, anxiety, any kind of mental health condition in the same way they get treatment for diabetes or kidney disease but, in reality, that doesn’t really happen. There are changes that can be made to help get people the care they need.”

    Other studies confirm the lack of mental health support in ACOs. Findings from a 2022 survey of ACOs across the U.S., showed that less than 50% of ACOs were able to offer mental health support services, including assertive community treatment and illness, offering and referring patients to supported employment, family psychoeducation, and management and recovery services.

    The incentive structure of ACOs may also contribute to the lack of mental health support. Determining how to measure quality of care and calculate fair payment is complicated.

    “Medicare risk adjustment models, which ultimately determine payment to accountable care organizations, tend to under-predict costs for people with depression and anxiety, so there’s not as much incentive and resources for treating those conditions,” Johnston said. “Right now, anxiety is not even included in the model, which often means accountable care organizations are underpaid for treating patients with these conditions. Some forms of depression are in the model, but not others. We need to have more incentives and accompanying financial resources directed toward caring for people with mental health conditions.”

    New legislation for mental health coverage

    The pandemic shined a spotlight on mental health challenges, and that may have motivated the government to focus more on mental health.

    In July of this year, the departments of Labor, Health and Human Services and the Treasury proposed rules to drive health insurers to comply with the 2008 Mental Health Parity and Addiction Equity Act.

    The law requires insurance plans that cover mental health and substance use disorder care to offer the same level of coverage for these services as they do for medical and surgical issues.

    “My hope is that this study will get policymakers to look at mental-health quality measures in a more specific way,” Johnston said.

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    Margie Zable Fisher

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  • Your retirement checklist: 9 steps toward a better retirement

    Your retirement checklist: 9 steps toward a better retirement

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    The U.S. is approaching “peak 65.” Are you ready for it?

    The number of people who turn 65 every day will peak in 2024, and more people will be staring at the possibility of retirement, often without a plan or a roadmap to help them thrive. Given that more people are living longer, that’s a long time to spend bored, lonely or financially insecure.

    Here’s a checklist to help you navigate the financial decisions, legal complications and social ramifications of retiring. Since 60% of workers retire earlier than planned, according to the Transamerica Institute and the Transamerica Center for Retirement Studies, you shouldn’t leave these tasks to the last minute. Get started now.

    1. Update your will and estate-planning documents

    Your will may be decades out of date and your financial accounts may have beneficiaries linked to a previous marriage. Dust off those documents and get them refreshed as soon as possible.

    “Before you even start thinking about retirement, there’s some housekeeping that needs to get done,” says Eric Bond, the president of Bond Wealth Management. 

    On your immediate to-do list, make sure you have a will, power of attorney and healthcare power of attorney in case you become incapacitated and can’t act on your own behalf. You’ll also need a HIPAA waiver as well as a trust, says Catherine Collinson, the chief executive and president of the nonprofit Transamerica Institute and Transamerica Center for Retirement Studies.

    “There’s still widespread belief that trusts are only for the affluent, but they’re for everyone,” Collinson says. “It’s amazing how small issues can take on enormous bureaucratic proportions. You want to try to avoid that.”

    Nicholas Yeomans, a financial adviser and the president of Yeomans Consulting Group, says to check retirement plans, life insurance and annuity accounts to make sure you have your beneficiaries listed properly. You may have a will, but beware that beneficiaries on such accounts supersede a will, he says. Be sure to name secondary or contingent beneficiaries, as well.

    2. Create a budget

    “It’s really basic, but only 23% of preretirees and 19% of retirees have a written plan. Until you put the numbers into a spreadsheet, it’s impossible to come up with realistic expectations for how you’re going to live your life. Otherwise, you’re just winging it,” Collinson says.

    “Life is much more complicated and challenging. You need backup plans and contingency plans,” she says. “It’s really important to plan for life’s unforeseen circumstances.”

    Bond, meanwhile, cautions that people who retire in their 60s need to realize that longevity has increased and they could be retired for decades.

    “Milk and eggs are not getting cheaper. You have to plan for the long haul,” he says.

    Working Americans think they need an average of $1.1 million to retire, according to the Schroders 2023 U.S. Retirement Survey. Financial advisers generally recommend that people have 75% to 85% of their preretirement income for each year of their retirement.

    Also read: How never to outlive your money

    3. Build up your cash reserves

    Once you have a budget in place, build up cash reserves to cover six to nine months of basic expenses, such as mortgage, utilities and living expenses, Yeomans says.

    “People are either one of two extremes when it comes to emergency funds — too much cash or not enough,” he says.

    And in the years leading up to retirement, Brandon Robinson, the president and founder of JBR Associates, recommends that you work on eliminating your “bad” debt, such as credit cards or vehicle payments. Having a mortgage, however, is not necessarily a bad thing, since a house is generally an appreciating asset, he says. 

    4. Consider hiring an adviser

    “Most people only retire once,” Collinson says. “Financial advisers have the depth and breadth of experience to help. Many workers have a 401(k), and with that often comes access to financial guidance. Take advantage of that.” 

    She adds: “In today’s turbulent economy, the many people who may have felt comfortable taking a do-it-yourself approach may need help navigating uncharted territory.”

    And make sure you meet with your financial adviser on an annual basis, Robinson adds.

    5. Plan for healthcare and long-term-care needs

    Healthcare is costly, and it can be even more so for retirees. It can cost as much as $5,100 a month for a home health aide, for instance, and an average of about $8,000 a month for a semiprivate room in a nursing home, according to the Genworth Cost of Care Survey. Genworth is a long-term-care insurance company. 

    By another measure, a 65-year-old retiring in 2023 could spend an average of $157,500 on health and medical expenses throughout his or her retirement, according to Fidelity Investments, which tracks retiree healthcare expenses annually. 

    Also think about the long-term costs of help with the activities of daily living, such as bathing, toileting and dressing — assistance that is not covered by Medicare.

    When asked what their plans are for if and when their heath declined, 46% of retirees said they’d rely on family and friends, and 31% said they don’t have any plans or haven’t thought about it, Collinson says. 

    “People don’t want to think about needing someone to bathe and dress them. The cost and potential impact of these topics is enormous,” she says. 

    Collinson says it’s important to learn about long-term care — what’s available and at what price. That can help guide your decisions about long-term care insurance, but options in that market have contracted and costs have risen, putting such services out of reach for many people

    Only 14% of retirees are very confident they could afford long-term care if needed, she says.

    “Many people are under the impression that Medicare covers more long-term care than it actually does,” Collinson says. “And qualifying for Medicaid is extreme. It means that you’re at dire financial means, if not bankrupt. And Medicaid facilities have long waiting lists.”

    6. Get the facts about Medicare 

    Speaking of Medicare, it’s important to learn what the program covers and what it doesn’t.

    “There are so many decision criteria about the type, level and cost of care,” Collinson says. “It behooves everyone to understand the Medicare options best for them and review those plans regularly.”

    Also, it’s critical to plan for Medicare when you’re 65, even if you’re not planning to retire until 67 or 70.

    There’s a seven-month window to enroll in Medicare, which includes the three months before you turn 65, the month of your birthday and the three months after. If you miss that seven-month window and you don’t have health insurance from a large employer, you can face lifetime penalties for late enrollment in Medicare. 

    The first step is to contact the Social Security Administration — not Medicare itself — to start Medicare. And you’ll enroll only yourself — it’s not a family plan.

    If you’re getting Social Security and you enroll in Medicare, your premiums will come directly out of your Social Security check. However, if you’re not getting Social Security yet, you should set up automatic payments for Medicare, because your enrollment can get canceled for nonpayment.

    7. Plan your Social Security strategy

    You need to know when and how to manage your Social Security claiming. The Social Security Administration website is a great starting point, but be sure to talk with a financial adviser or visit your 401(k) plan’s financial resource center to get more information.

    Read: How much does my Social Security benefit increase when I delay filing?

    “Ideally, you want to wait until the full retirement age or age 70, which is the maximum age,” Collinson says. 

    Full retirement age is 67 for those born in 1960 or later.

    “When to take Social Security is a major decision that depends on your health, the health of your spouse, your jobs. Making that decision is a big one. Don’t take it lightly,” Robinson says. 

    Read: Inflation is already racing past next year’s Social Security COLA

    8. Consider downsizing

    “Consider downsizing or moving, but take your time,” Yeomans says. “People make major purchase mistakes in the first 12 to 18 months of retirement. But take your time. Consider renting before pulling that trigger.”

    Aging in place is something about nine out of 10 people want to do, according to a survey from Transamerica Institute and the Transamerica Center for Retirement Studies, but Collinson says people need to prepare their homes for that.

    You may need wider doorways that can accommodate a wheelchair, as well as chairlifts, grab bars and shower seats. 

    “If your dream home in retirement has lots of stairs, know that you may need to move when stairs become unmanageable,” she says.

    9. Retire to something meaningful

    Once you have the financial and legal aspects taken care of, think about how — and with whom — you want to spend your time in retirement. 

    “Make sure you’re not retiring from something, but instead retiring to something,” Yeomans says. “Men struggle with this the most. The average man has no close friends in their life who aren’t connected to work. And so much of our health in retirement comes from relationships.”

    Now read: In retirement, time is short. Don’t waste it on things you hate.

    People often don’t realize what they’ll lose when they quit working: routine, structure, social interactions, mental stimulation and in some cases physical activity, says Robert Laura, founder of the Retirement Coaches Association.

    People also often don’t take their personality into account when considering retirement.

    “If you’re a Type A personality, you may feel out of sorts with endless time. A lot of people don’t critically question retirement. They think it’s golden. But people often don’t want to retire — they just want to stop doing their primary job,” Laura says. 

    Joe Casey, managing partner of retirement-coaching company Retirement Wisdom, recommends talking to people who are thriving in retirement and learning how they spend their time and energy. 

    “People miss the challenge of working. What’s the new challenge that will help you keep growing? Don’t get too hung up on finding a singular new purpose. Try new things. Volunteer. Try several activities and be open to experimenting,” Casey says. 

    Casey suggests mapping out what a typical day or week will look like in retirement and how you plan to fill those hours. Give yourself some structure by having three things to do every day. That will provide you with a road map of how to spend your time but will also give you flexibility to let the day unfold.

    Laura says the newly retired should set 30-, 60- and 90-day goals to create some structure and have small objectives to work toward.

    “People suffer from choice paralysis — they have all the time in the world and so many options open to them. People go into retirement with vague ideas and don’t know where to start doing something, so they never do it,” Laura says. 

    “Retirement is the longest New Year’s resolution. It’s goals you have and never accomplish unless you’re focused. You don’t get extra motivation or energy in retirement, so you need to focus on what you want to accomplish,” Laura says.

    A sobering statistic may spur you into action: The average retiree watches as much as 47 hours of television a week, according to AgeWave.

    To avoid that, start thinking about and planning for retirement with your partner far ahead of the actual date. Learn each other’s goals and expectations for retirement and compare notes. Some adjustments might be in order.

    “What if one wants to sail around the world and the other wants to see the grandkids every month?” Laura says.

    Casey also recommends taking retirement for a test drive by taking a week off work. “You can get a good sense of retirement in a week trial,” he says. “It will show you how long a day can be.”

    And Collinson says to prioritize physical fitness — but don’t forget about your mental health, too. Stay engaged with other people and avoid isolation. 

    Loneliness is as deadly as smoking up to 15 cigarettes a day and is associated with a greater risk of cardiovascular disease, dementia, stroke, depression, anxiety and premature death, according to a recent advisory from the U.S. Surgeon General.

    The takeaway: Make sure you plan how you’ll carry out your hopes and dreams in retirement to make it all feel worthwhile.

    “What was the reason you worked hard for so many years?” Casey says. “It wasn’t to watch 47 hours of TV each week.”

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  • Why Republican Presidential Contenders Are Mostly Silent About Biden’s Signature Prescription Drug Policy

    Why Republican Presidential Contenders Are Mostly Silent About Biden’s Signature Prescription Drug Policy

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    In the weeks since the White House announced the first 10 prescription drugs subject to Medicare’s new power to negotiate drug prices and signaled their intention to make it a major part of President Joe Biden’s reelection campaign, the normally divided field of Republican presidential challengers has been united in its response: Silence.

    Rather than contest a Democratic president’s biggest health care achievement, as they did with a bitter, campaign-defining fight against Obamacare in 2012, Republicans have mostly pretended Biden’s achievement doesn’t exist.

    The party’s reluctance to speak about Biden’s prescription drug policy, let alone campaign on an alternative, speaks to just how much the contemporary GOP has abandoned the pretense of interest in an array of burning domestic policy issues where the party’s ideological preferences conflict with public opinion.

    That reality has given Biden an opening to freely tout an immensely popular achievement to some of the most reliable and crucial voting blocs in American elections.

    “President Biden and Democrats accomplished what Republicans, including Donald Trump and the slate of 2024 Republicans, promised but failed to deliver: lower prescription drug costs,” Ammar Moussa, a spokesperson for Biden’s re-election campaign, said in a statement. “Unlike Donald Trump, President Biden had the courage to stand up to Big Pharma, and thanks to his and Democrats’ leadership, seniors won’t have to choose between putting a meal on the table and their life-saving medication.”

    Biden clearly hopes that news of the lower prices, which won’t take effect until 2026, will be a key asset in his bid for a second term ― not least because no Republicans voted for the sweeping bill containing the drug provisions.

    Public opinion is also overwhelmingly on Biden’s side. More than 80% of Americans, including 75% of Republicans, support Medicare price negotiation, according to a West Health-Gallup poll released in late August.

    “The Inflation Reduction Act is good politics, and it’s good policy,” said David Mitchell, president of the advocacy group Patients for Affordable Drugs. “Any politician who says otherwise is going against the will of the American people.”

    GOP presidential candidate Vivek Ramaswamy, a former investor in pharmaceutical and biologics development, expressed skepticism of price negotiation.

    Reba Saldanha/Associated Press

    Anything But Price Negotiation

    HuffPost reached out to the campaigns of former President Donald Trump and the eight Republican presidential candidates who were on the Milwaukee debate stage in August: Florida Gov. Ron DeSantis (R); entrepreneur Vivek Ramaswamy; former South Carolina Gov. Nikki Haley (R); Sen. Tim Scott (R-S.C.); North Dakota Gov. Doug Burgum (R); former New Jersey Gov. Chris Christie (R); former Vice President Mike Pence; and former Arkansas Gov. Asa Hutchinson (R).

    Only three candidates ― Ramaswamy, Trump, and Hutchinson ― responded.

    In an interview during a campaign swing through Iowa in late August, Ramaswamy, who made his fortune investing in medicines that could eventually be subject to Medicare price negotiation, panned Biden’s policy while declining to say whether he would try to repeal it.

    “That narrow action is not super well thought out,” Ramaswamy said. “The use of the word negotiation is a misnomer, when in fact you’re just negotiating with a single party.”

    Pressed on whether he would pursue repeal, Ramaswamy replied: “I’m not going to flash freeze the status quo and then respond to one narrow piece of legislation because it all works in concert, and if I’m taking on healthcare, it’s not going to be picking around the edges of it.”

    Ramaswamy prefers to reduce the Food and Drug Administration’s regulation of drugs and biologics, which he believes limits competition by making it too expensive for new treatments to get to market. He also wants to “dismantle” the Center for Medicare and Medicaid Services, which runs Medicare and Medicaid, by getting more seniors to sign up for privately managed Medicare Advantage plans.

    Hutchinson and Trump’s campaigns were the only other ones to respond to inquiries about pharmaceutical policy.

    As an example of his approach to tackling pharmaceutical costs, Hutchinson cited a 2018 law he signed authorizing the state government to license and regulate pharmacy benefit managers, or PBMs ― the middleman companies that manage health insurers’ prescription drug plans. PBMs claim they provide a service by negotiating lower rates from drug manufacturers, but critics believe that the highly concentrated industry pockets the savings it negotiates at the expense of consumers and independent pharmacists. (There continues to be bipartisan support in Congress for reining in PBMs at the federal level.)

    “As Governor, I took decisive action by signing legislation that reformed PBMs, effectively lowering drug prices for Arkansas residents,” Hutchinson said in a statement to HuffPost.

    “The Inflation Reduction Act’s Medicare negotiations approach is constitutionally precarious and risks unintended consequences that could stifle research and innovation.”

    – Former Arkansas Gov. Asa Hutchinson (R)

    Hutchinson expressed opposition to Biden’s price negotiation plan without explicitly stating whether he would seek to repeal it ― or what kind of other reforms he would try to enact as president.

    “While it’s essential to find ways to alleviate the financial burden on Americans, the Inflation Reduction Act’s Medicare negotiations approach is constitutionally precarious and risks unintended consequences that could stifle research and innovation,” he said.

    While Pence did not respond to HuffPost, he has previously spoken critically about Biden’s policy. “I would have concerns about, ultimately, being able to use the power of the government to impose price controls under the free market,” he told Semafor in late August.

    Trump’s campaign referred HuffPost to a June campaign video in which Trump promised to re-issue a now-shelved executive order that “will tell Big Pharma that we will only pay the best price they offer to foreign nations, who have been taking advantage of us for so long.”

    Trump suggested that a revived version of the September 2020 “most favored nation” order, which applied to Medicare Part B drugs administered in doctor’s offices and the Part D drugs purchased at pharmacies, would provide Americans savings at the expense of patients in foreign countries that purchase U.S. drugs.

    “They should have never rescinded my original Executive Order. It just shows you the power of Big Pharma. But this will force Big Pharma to RAISE prices on foreign countries and REDUCE prices very substantially for American Patients,” he said. (The campaign’s transcript of Trump’s remarks capitalizes certain words.)

    The Biden administration indeed withdrew Trump’s executive order, but only after multiple federal judges blocked the order from taking effect.

    Sen. Charles Grassley (R-Iowa), right, consults Sen. Ron Wyden (D-Ore.) before a 2019 hearing on prescription drug prices. Their bill to address the problem never got a floor vote.
    Sen. Charles Grassley (R-Iowa), right, consults Sen. Ron Wyden (D-Ore.) before a 2019 hearing on prescription drug prices. Their bill to address the problem never got a floor vote.

    Tom Williams/Getty Images

    Trump’s Broken Campaign Promise ― And Legislative Failure

    But while Trump, unlike his GOP rivals, is running explicitly on taking on Big Pharma, he too has declined to address Biden’s legislation empowering Medicare to negotiate lower prescription drug prices.

    That could be because, as president, Trump abandoned his 2016 campaign promise to enact the same policies. In the months after Trump’s November 2016 election win, he stood by the policy, fuming that the pharmaceutical industry was “getting away with murder.” By the time he met with top pharmaceutical executives in February 2017, however, he apparently changed his mind about the policy and never seriously pursued it as president.

    Trump’s embrace and prompt abandonment of Medicare drug price negotiation were typical of his on-and-off commitment to tackling drug affordability. The inconsistency of his approach ultimately undermined his results.

    “In general, the Trump administration was actually quite proactive here, and they worked with Congress to try to lower the costs for seniors and to establish a benchmark for paying for drugs that would be lower than what we otherwise pay,” said Rena Conti, a Boston University business school professor, who specializes in prescription drug policy. “What happened, however, is that they were unsuccessful in pursuing these policies.”

    As president, Trump used the Executive Branch to take a number of steps to reduce prescription drug costs. For example, in 2017, the Trump administration proposed a rule that would reduce Medicare’s payments to hospitals for drugs that those hospitals obtained at a discounted rate, effectively saving Medicare money. Hospitals’ trade associations sued to overturn the rule, resulting in a July 2022 opinion by the U.S. Supreme Court that upheld lower courts’ decisions striking it down.

    Trump also gave his blessing to a bipartisan prescription drug reform bill spearheaded by Sens. Charles Grassley (R-Iowa) and Ron Wyden (D-Ore.), who were then, respectively, the chair and ranking member of the Senate Finance Committee. The 2019 bill would have, among other things, required drug makers to provide rebates to the federal government for drugs covered by Medicare that grew more than the rate of inflation; capped out-of-pocket drug costs for Medicare beneficiaries; and required PBMs to adopt greater price transparency.

    After the bill advanced out of the Senate Finance Committee in a bipartisan vote in September 2019, then-Senate Majority Leader Mitch McConnell (R-Ky.) never scheduled it for a vote on the Senate floor.

    Democrats blamed McConnell ― and, by extension, Trump, for failing to lean on his GOP partners in Congress to pass a bill. In March 2022, even Grassley admitted that pharmaceutical reform might only be possible with Democrats in charge of Congress.

    Theo Merkel, a former special assistant for economic policy to Trump and a key figure in the administration’s pharmaceutical policymaking, faults Democrats for insisting on the inclusion of rebates for drug costs that exceeded the rate of inflation. “The cap on inflation alienated many from the other major reforms on which there was a lot of consensus,” said Merkel, who now runs the private health reform initiative at the Paragon Health Institute, a conservative think tank.

    Trump speaks before signing executive orders on prescription drug prices on July 24, 2020. His failure to pass legislation undercut his impact on prescription drugs policy.
    Trump speaks before signing executive orders on prescription drug prices on July 24, 2020. His failure to pass legislation undercut his impact on prescription drugs policy.

    Drew Angerer/Getty Images

    A Flurry Of Executive Orders

    Absent drug price legislation, Trump scrambled to act unilaterally to lower drug prices in the final months of his presidency.

    On a single day in July 2020, Trump signed three executive orders to reduce drug prices.

    The first order required community health centers that serve low-income communities to pass along to patients the savings that they receive on bulk purchases of insulin and EpiPens. A second order cleared a path for the importation of cheaper drugs from foreign countries. And a third order sought to have PBMs forfeit their savings to patients.

    And, of course, in September 2020, Trump proceeded with his most-favored nation executive order tying Medicare drug prices to the lowest rates abroad.

    But executive orders are inherently less durable than legislation. Trump’s actions were hobbled by legal and implementation challenges from the start.

    The most-favored nation order stalled out in federal court. And Biden rescinded Trump’s community health center and pharmacy benefit manager executive orders. (Unlike Biden’s price negotiation, the PBM proposal was projected to increase federal spending by $177 billion.)

    Trump’s order creating a process for foreign drug importation remains in place, but it is unclear if or when the federal government will grant the waivers to state governments seeking to take advantage of the rule. Under DeSantis’ leadership, Florida is suing Biden’s FDA for failing to, thus far, approve Florida’s November 2020 request for importation rights.

    Meanwhile, Biden’s Inflation Reduction Act incorporated the Grassley-Wyden bill’s inflation ceiling while also empowering Medicare to eventually negotiate the prices of at least 20 drugs a year, capping Medicare beneficiaries’ annual out-of-pocket costs at $2,000 and capping monthly out-of-pocket costs for insulin at $35.

    “In general, the Trump administration was actually quite proactive here and they worked with Congress to try to lower the costs for seniors and to establish a benchmark for paying for drugs that would be lower than what we otherwise pay. What happened however is that they were unsuccessful in pursuing these policies.”

    – Rena Conti, prescription drug policy expert, Boston University

    Price negotiation alone is projected to save the federal government more than $100 billion over a decade, slightly more than the Grassley-Wyden bill would have saved. The IRA’s caps on out-of-pocket, which are lower than in the bipartisan bill, are projected to save 18.7 million seniors about $400 each per year.

    Merkel encourages the next GOP president to repeal the price negotiation part of the law and preserve out-of-pocket cost caps while advancing “other reforms that would push drug prices lower without depending on political appointees and bureaucrats to determine which drugs have value and how much.”

    Some Republicans evidently believe that Merkel’s position is smart politics. McConnell, for example, has railed against Biden’s policy of “prescription drug socialism,” warning that it will result in the development of hundreds of fewer drugs. And House Republicans plan to hold a hearing later this month on how the IRA’s “price setting scheme means fewer cures for patients.”

    Even if the next Republican presidential nominee sides with advisors who see drug price negotiation as a vulnerability for Biden, though, there are practical obstacles to repealing that provision of the IRA alone. The law uses savings that the federal government is due to get from negotiating lower prices to finance the caps on out-of-pocket costs that provide direct benefits to consumers, Conti noted. Any repeal effort that preserves the out-of-pocket caps would presumably require a substitute source of revenue.

    “You can’t disentangle one part and leave the rest,” she said. “The Biden administration absolutely has the advantage.”

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  • U.S. Announces First 10 Drugs For Medicare Price Negotiation

    U.S. Announces First 10 Drugs For Medicare Price Negotiation

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    The Biden administration released its list of the first 10 drugs that Medicare will negotiate for price cuts with drugmakers, including some of the most widely prescribed or expensive drugs for conditions such as heart disease, diabetes, and autoimmune conditions. What do you think?

    “My brand of cigarettes better be on that list.”

    Horace Steinberg, Unemployed

    Archaeologists Uncover Living Guy By Mistake

    “It’s exciting to see America edge closer to ‘developed nation’ status.”

    Elyssa Moore, Knee Model

    “This will only encourage more people to develop atrial fibrillation.”

    Dinesh Rao, Hydration Supervisor

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  • Medicare to start negotiating prices for 10 drugs. Here are the medications.

    Medicare to start negotiating prices for 10 drugs. Here are the medications.

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    Medicare, the health insurance program for people over 65 years old, said it will start negotiating prices on 10 drugs, part of its mandate under the Inflation Reduction Act to lower prescription prices for older Americans. 

    The first drugs under price negotiations include diabetes medication Jardiance, insulin such as the NovoLog FlexPen and the heart medication Entresto, according to a statement by the U.S. Department of Health and Human Services. 

    The negotiations mark the first time Medicare has been able to haggle over drug prices for its 65 million enrollees. They come at a time when 1 in 5 seniors say they are skipping doses because of the cost of their medications. While the negotiations are expected to lower drug costs for Medicare enrollees, the effort faces litigation from drugmakers and heavy criticism from Republican lawmakers. 

    AARP, the advocacy group for older Americans, called the negotiations “monumental.”

    “The No. 1 reason seniors skip or ration their prescriptions is because they can’t afford them. This must stop,” AARP executive vice president Nancy LeaMond said in a statement. “Allowing Medicare to negotiate prices for these first 10 drugs will finally bring much-needed access and relief to American families, particularly older adults.”


    Insurance companies changing coverage for weight loss drugs

    00:47

    “This is a ground-breaking change for Medicare enrollees,” Mariana Socal, an associate scientist at Johns Hopkins University, told CBS MoneyWatch. “For the very first time, they will actually know how much the drugs that they take actually cost.”

    She added, “This is something that nobody really knows — it’s not only Medicare enrollees who don’t know, but any person in the United States doesn’t know how much their drugs really cost.”

    The 10 drugs under negotiation

    Medicare’s first drug price negotiations will focus on insulin, blood thinners and more. The drugs are:

    • Eliquis
    • Jardiance
    • Xarelto
    • Januvia
    • Farxiga
    • Entresto
    • Enbrel
    • Imbruvica
    • Stelara
    • Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

    Why were these drugs picked?

    The Biden administration said that it focused on drugs that were covered by Part D, Medicare’s primary coverage plan for prescription medications, which are among costliest drugs for the health insurance program. 

    “These drugs represent a serious budget impact for the Medicare program,” Socal of Johns Hopkins said. “They are really the heavy heaters for the program.”

    It also picked drugs without competition that have been on the market for at least 7 years, while excluding some types of medications, such as some orphan drugs, which are aimed at patients suffering from rare diseases, officials said on a Tuesday conference call. 

    The list also includes several versions of Novo Nordisk’s Fiasp, a fast-acting insulin taken around meals, although the Inflation Reduction Act already caps Medicare patient out-of-pocket costs for insulin at $35 a month. An administration official said Tuesday that that upper limit will hold but there could be further changes in those costs. 

    Overall, the 10 drugs treat diseases that are very common among its enrollees, such as blood clots, diabetes, heart disease and chronic kidney disease, officials said.

    How much could seniors save on medications?

    According to the Biden administration, seniors spent $3.4 billion in out-of-pocket costs for these medications in 2022. In all, Medicare spent about $50.5 billion on these 10 medications, or 20% of its Part D prescription drug costs, between June 1, 2022 and May 31, 2023, the Biden adminsitration said.

    The negotiations, as well as other pricing mechanisms authorized by the Inflation Reduction Act, could save taxpayers $160 billion by cutting Medicare’s spending on drugs, President Joe Biden said in a statement released Tuesday. 

    “When implemented, prices on negotiated drugs will decrease for up to 9 million seniors,” Biden added.

    Part D enrollees are expected to save about $400 a year on drug costs in 2025 due to several other IRA provisions, such as a $2,000 cap on out-of-pocket spending, officials said. However, that estimate doesn’t include the impact of negotiations on drug prices, they added.

    When would lower prices become effective? 

    The agreed-upon negotiated prices would be published by Sept. 1, 2024. 

    But the negotiated prices for these drugs wouldn’t go into effect until Jan. 1, 2026, the Biden administration said. 

    Will Medicare negotiate prices on additional drugs? 

    Yes, the Biden administration said it will select up to 15 more drugs covered under part D for 2027, and another 15 drugs for 2028, with the latter including drugs covered under both Part B and Part D. 

    In subsequent years, 20 additional drugs will be picked for negotiations annually. 

    Part B covers doctor’s visits and some outpatient drugs that must be administered in a medical office. Part D is the broader coverage for prescriptions.

    What is the status of the drug industry’s lawsuits?

    The plan already faces eight lawsuits, including complaints filed by drugmakers Merck and Bristol-Myers Squibb, and a key lobbying group — the Pharmaceutical Research and Manufacturers of America, or PhRMA.

    PhRMA said in a federal court complaint filed earlier this year that the act forces drugmakers to agree to a “government-dictated price” under the threat of a heavy tax and gives too much price-setting authority to the U.S. Department of Health and Human Services.

    “[T]he biggest risk that would delay or prevent implementation of the Medicare drug price negotiation program, as currently proposed, remains litigation,” noted Heights Securities in a Tuesday research report. 

    The Biden administration on Tuesday said that nothing in the Constitution prohibits Medicare from negotiating drug prices.

    Even so, given the lawsuits, which have been filed across seven U.S. District Court districts, “it is very likely that the groups will receive conflicting rulings that will put the legal challenges on a fast track to the Supreme Court,” Heights Securities predicted.

    Does this have an impact on people outside of Medicare?

    Long-term, the negotiations may also help younger Americans by bringing more transparency to drug pricing, Socal told CBS MoneyWatch.

    “Initially, the movement will start with these 10 drugs,” she said. “Patients who are not part of Medicare will say, for example, ‘Wait a minute, I’m paying $200 out of pocket for this drug and Medicare announced that the Medicare price will be $100. How can this be possible?’”

    With reporting by the Associated Press.

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  • See which drugs President Biden is targeting first for Medicare price-lowering talks

    See which drugs President Biden is targeting first for Medicare price-lowering talks

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    WASHINGTON — The Biden administration is targeting the blood thinner Eliquis, diabetes treatment Jardiance and eight other medications for Medicare’s first-ever drug price negotiations as it seeks to lower medical costs for Americans.

    The administration on Tuesday released a list of the 10 drugs for which prices will be negotiated directly with the manufacturer. The move is expected to cut costs for many patients, but it faces litigation from drugmakers and heavy criticism from Republican lawmakers, and it will be years before consumers notice any savings.

    The effort is a centerpiece of President Joe Biden’s reelection pitch as the Democrat seeks to show Americans he’s deserving of a second term because of the work he’s doing to lower costs for them while the country is struggling with inflation. But like the drug negotiations, many of Biden’s biggest policy moves take time to roll out, and his challenge is to persuade the public to be patient.

    “For many Americans, the cost of one drug is the difference between life and death, dignity and dependence, hope and fear,” Biden said in a statement. “That is why we will continue the fight to lower healthcare costs — and we will not stop until we finish the job.”

    Biden plans to deliver a speech on health care costs from the White House later Tuesday. He’ll be joined by Vice President Kamala Harris.

    The drugs on the list announced Tuesday accounted for more than $50 billion in Medicare prescription drug costs between June 1, 2022, and May 31, according to the Centers for Medicare and Medicaid Services, or CMS.

    That includes more than $16 billion on Eliquis. The drug from Pfizer and Bristol-Myers Squibb treats blood clots in the legs and lungs and reduces the risk of stroke in people with an irregular heartbeat called atrial fibrillation.

    Senior administration officials said Tuesday that the 10 drugs selected for negotiation are among the most costly to the Medicare program. They said 8.2 million people with Medicare Part D prescription drug coverage take them.

    The diabetes treatments Jardiance from Eli Lilly and Co. and Boehringer Ingelheim and Januvia from Merck made the list. It also included Amgen’s autoimmune disease treatment Enbrel and Entresto from Novartis, which is used to treat heart failure.

    Other drugs on the list include AstraZeneca’s diabetes and heart failure treatment Farxiga and three drugs from Johnson & Johnson: the blood thinner Xarelto, the blood cancer treatment Imbruvica and it’s biggest seller, Stelara, an IV treatment for psoriasis and other inflammatory disorders.

    The list also includes several versions of Novo Nordisk’s Fiasp, a fast-acting insulin taken around meals.

    The Inflation Reduction Act already caps Medicare patient out-of-pocket costs for insulin at $35 a month. An administration official said Tuesday that upper limit will hold but there could be further changes in those costs.

    The announcement Tuesday is another significant step toward taming drug pricing under the Inflation Reduction Act, which was signed by Biden last year. The law also calls for a $2,000 annual cap on how much people with Medicare have to pay out of pocket for drugs starting in 2025.

    For drugs on the list released Tuesday, the government aims to negotiate the lowest maximum fair price. That could help some patients who have coverage but still face big bills like coinsurance payments when they get a prescription.

    About 9% of Medicare beneficiaries age 65 and older said in 2021 that they did not fill a prescription or skipped a drug dose due to cost, according to research by the Commonwealth Fund, which studies health care issues.

    Currently, pharmacy benefit managers that run Medicare prescription plans negotiate rebates off a drug’s price. Those rebates sometimes help reduce premiums customers pay for coverage. But they may not directly change what a patient spends at the pharmacy counter.

    The new drug price negotiations aim “to basically make drugs more affordable while also still allowing for profits to be made,” said Gretchen Jacobson, who researches Medicare issues at Commonwealth.

    The federal government will benefit most from any lowered drug prices, noted Larry Levitt, an executive vice president for health policy at KFF, another non-profit that studies health care. But he said that if Medicare spends less on prescription drugs, then premiums for everyone with its drug coverage also should fall.

    Drug companies that refuse to be a part of the new negotiation process will be heavily taxed.

    The pharmaceutical industry has been gearing up for months to fight these rules. The lobbying group Pharmaceutical Research and Manufacturers of America said Tuesday that the drug list announcement stemmed from “a rushed process focused on short-term political gain rather than what is best for patients.”

    “Many of the medicines selected for price setting already have significant rebates and discounts due to the robust private market negotiation that occurs in the Part D program today,” PhRMA CEO Stephen J. Ubl said in a statement.

    PhRMA representatives also have said pharmacy benefit managers can still restrict access to drugs with negotiated prices by moving the drugs to a tier of their formulary — a list of covered drugs — that would require higher out-of-pocket payments. Pharmacy benefit managers also could require patients to try other drugs first or seek approval before a prescription can be covered.

    PhRMA and several drugmakers have filed lawsuits over the administration’s plan.

    Republican lawmakers also have blasted the Biden administration, saying companies might pull back on introducing new drugs that could be subjected to future haggling. They’ve also questioned whether the government knows enough to suggest prices for drugs.

    CMS plans to meet this fall with drugmakers that have a drug on its list, and government officials say they also plan to hold patient-focused listening sessions. By February 2024, the government will make its first offer on a maximum fair price and then give drugmakers time to respond.

    Any negotiated prices won’t take hold until 2026.

    CMS aims to add 15 more drugs to its negotiation list for 2027 and another 15 for 2028. It then plans to add up to 20 more for each year after that.

    ___

    Murphy reported from Indianapolis.

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  • Biden targets diabetes drug Jardiance, blood thinner Eliquis and 8 others for Medicare price talks

    Biden targets diabetes drug Jardiance, blood thinner Eliquis and 8 others for Medicare price talks

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    WASHINGTON — The blood thinner Eliquis and popular diabetes treatments including Jardiance are among the first drugs that will be targeted for price negotiations in an effort to cut Medicare costs.

    President Joe Biden’s administration on Tuesday released a list of 10 drugs for which the federal government will take a first-ever step: negotiating drug prices directly with the manufacturer.

    The move is expected to cut costs for some patients but faces litigation from the drugmakers and heavy criticism from Republican lawmakers. It’s also a centerpiece of the Democratic president’s reelection pitch as he seeks a second term in office by touting his work to lower costs for Americans at a time when the country has struggled with inflation.

    The diabetes treatments Jardiance from Eli Lilly and Co. and Merck’s Januvia made the list, along with Amgen’s autoimmune disease treatment Enbrel. Other drugs include Entresto from Novartis, which is used to treat heart failure.

    “For many Americans, the cost of one drug is the difference between life and death, dignity and dependence, hope and fear,” Biden said in a statement. “That is why we will continue the fight to lower healthcare costs — and we will not stop until we finish the job.”

    Biden plans to deliver a speech on health care costs from the White House later Tuesday. He’ll be joined by Vice President Kamala Harris.

    The drugs on the list announced Tuesday accounted for more than $50 billion in Medicare prescription drug costs between June 1, 2022, and May 31, according to the Centers for Medicare and Medicaid Services, or CMS.

    Medicare spent about $10 billion in 2020 on Eliquis, according to AARP research. The drug treats blood clots in the legs and lungs and reduces the risk of stroke in people with an irregular heartbeat called atrial fibrillation.

    The announcement is a significant step under the Inflation Reduction Act, which was signed by Biden last year. The law requires the federal government for the first time to start negotiating directly with companies about the prices they charge for some of Medicare’s most expensive drugs.

    More than 52 million people who either are 65 or older or have certain severe disabilities or illnesses get prescription drug coverage through Medicare’s Part D program, according to CMS.

    About 9% of Medicare beneficiaries age 65 and older said in 2021 that they did not fill a prescription or skipped a drug dose due to cost, according to research by the Commonwealth Fund, which studies health care issues.

    The agency aims to negotiate the lowest maximum fair price for drugs on the list released Tuesday. That could help some patients who have coverage but still face big bills like high deductible payments when they get a prescription.

    Currently, pharmacy benefit managers that run Medicare prescription plans negotiate rebates off a drug’s price. Those rebates sometimes help reduce premiums customers pay for coverage. But they may not change what a patient spends at the pharmacy counter.

    The new drug price negotiations aim “to basically make drugs more affordable while also still allowing for profits to be made,” said Gretchen Jacobson, who researches Medicare issues at Commonwealth.

    Drug companies that refuse to be a part of the new negotiation process will be heavily taxed.

    The pharmaceutical industry has been gearing up for months to fight these rules. Already, the plan faces several lawsuits, including complaints filed by drugmakers Merck and Bristol-Myers Squibb and a key lobbying group, the Pharmaceutical Research and Manufacturers of America, or PhRMA.

    PhRMA said in a federal court complaint filed earlier this year that the act forces drugmakers to agree to a “government-dictated price” under the threat of a heavy tax and gives too much price-setting authority to the U.S. Department of Health and Human Services.

    PhRMA representatives also have said pharmacy benefit managers can still restrict access to drugs with negotiated prices by moving the drugs to a tier of their formulary — a list of covered drugs — that would require higher out-of-pocket payments. Pharmacy benefit managers also could require patients to try other drugs first or seek approval before a prescription can be covered.

    Republican lawmakers also have blasted the Biden administration for its plan, saying companies might pull back on introducing new drugs that could be subjected to future haggling. They’ve also questioned whether the government knows enough to suggest prices for drugs.

    CMS will start its negotiations on drugs for which it spends the most money. The drugs also must be ones that don’t have generic competitors and are approved by the Food and Drug Administration.

    CMS plans to meet this fall with drugmakers that have a drug on its list, and government officials say they also plan to hold patient-focused listening sessions. By February 2024, the government will make its first offer on a maximum fair price and then give drugmakers time to respond.

    Any negotiated prices won’t take hold until 2026. More drugs could be added to the program in the coming years.

    ___

    Murphy reported from Indianapolis.

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  • Judge orders Montana health clinic to pay nearly $6 million over false asbestos claims

    Judge orders Montana health clinic to pay nearly $6 million over false asbestos claims

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    BILLINGS, Mont. — A health clinic in a Montana town plagued by deadly asbestos contamination must pay the government almost $6 million in penalties and damages after it submitted hundreds of false asbestos claims, a judge ruled.

    The 337 false claims made patients eligible for Medicare and other benefits they shouldn’t have received. The federally funded clinic has been at the forefront of the medical response to deadly pollution from mining near Libby, Montana

    The judgement against the Center for Asbestos Related Disease clinic comes in a federal case filed by BNSF Railway in 2019 under the False Claims Act, which allows private parties to sue on the government’s behalf.

    BNSF — which is itself a defendant in hundreds of asbestos-related lawsuits — alleged the center submitted claims on behalf of patients without sufficient confirmation they had asbestos-related disease.

    After a seven-person jury agreed last month, U.S. District Judge Dana Christensen said in a July 18 order that he was imposing a stiff penalty to prevent future misconduct.

    Christensen said he was concerned in particular that the clinic’s high-profile doctor, Brad Black, had diagnosed himself with asbestos-related disease and that a nurse signed off for benefits for her own mother.

    The judge also cited evidence at trial of high rates of opioid prescriptions from the clinic for people who may not have had a legitimate asbestos-related diagnosis.

    The clinic demonstrated “a reckless disregard for proper medical procedure and the legal requirements of government programs,” the judge wrote.

    As instructed by the law, the judge tripled the $1.1 million in damages found by the jury, to almost $3.3 million, and imposed $2.6 million in additional penalties.

    The judge awarded BNSF 25% of the proceeds, as allowed under the False Claims Act. Federal prosecutors previously declined to intervene in the case, and there have been no criminal charges brought against the clinic.

    The clinic’s attorneys appealed the jury’s verdict to the 9th U.S. Circuit Court of Appeals on Thursday. Clinic director Tracy McNew has said the facility could be forced into bankruptcy if forced to pay a multimillion-dollar judgement.

    McNew and Black did not immediately respond to messages Saturday seeking comment.

    The verdict also could harm the clinic’s reputation and potentially undermine lawsuits by asbestos victims against BNSF and others that courts have held liable for contamination that’s turned Libby into one of the nation’s deadliest polluted sites. BNSF operated a railyard in town through which asbestos-tainted vermiculite was transported from the nearby W.R. Grace Co. mine.

    Railway spokesperson Lena Kent said the clinic’s actions wasted taxpayer money while diverting resources from people in legitimate need.

    “The focus of this trial was on CARD’s treatment of the hundreds of people who were not sick,” Kent said. “It’s a sad chapter in this saga that this trial was necessary to restore the focus on those who are truly impacted and who should continue to have access to the benefits and care they deserve.”

    The Libby area was declared a Superfund site two decades ago following media reports that mine workers and their families were getting sick and dying due to hazardous asbestos dust.

    Health officials have said at least 400 people have been killed and thousands sickened from asbestos exposure in the Libby area.

    The clinic has certified more than 3,400 people with asbestos-related diseases and received more than $20 million in federal funding, according to court documents.

    Hampering the clinic’s defense in the false claims case was a ruling that barred testimony from former U.S. Sen. Max Baucus of Montana. Baucus helped craft a provision in the Affordable Care Act that made Libby asbestos victims eligible for government benefits. He’s said the clinic was acting in line with that law.

    Asbestos-related diseases can range from a thickening of a person’s lung cavity that can hamper breathing to deadly cancer.

    Exposure to even a minuscule amount of asbestos can cause lung problems, according to scientists. Symptoms can take decades to develop.

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  • Judge orders Montana health clinic to pay nearly $6 million over false asbestos claims

    Judge orders Montana health clinic to pay nearly $6 million over false asbestos claims

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    BILLINGS, Mont. — A health clinic in a Montana town plagued by deadly asbestos contamination must pay the government almost $6 million in penalties and damages after it submitted hundreds of false asbestos claims, a judge ruled.

    The 337 false claims made patients eligible for Medicare and other benefits they shouldn’t have received. The federally funded clinic has been at the forefront of the medical response to deadly pollution from mining near Libby, Montana

    The judgement against the Center for Asbestos Related Disease clinic comes in a federal case filed by BNSF Railway in 2019 under the False Claims Act, which allows private parties to sue on the government’s behalf.

    BNSF — which is itself a defendant in hundreds of asbestos-related lawsuits — alleged the center submitted claims on behalf of patients without sufficient confirmation they had asbestos-related disease.

    After a seven-person jury agreed last month, U.S. District Judge Dana Christensen said in a July 18 order that he was imposing a stiff penalty to prevent future misconduct.

    Christensen said he was concerned in particular that the clinic’s high-profile doctor, Brad Black, had diagnosed himself with asbestos-related disease and that a nurse gave a similar diagnosis to her own mother.

    The judge also cited evidence at trial of high rates of opioid prescriptions from the clinic for people who may not have had a legitimate asbestos-related diagnosis.

    The clinic demonstrated “a reckless disregard for proper medical procedure and the legal requirements of government programs,” the judge wrote.

    As instructed by the law, the judge tripled the $1.1 million in damages found by the jury, to almost $3.3 million, and imposed $2.6 million in additional penalties.

    The judge awarded BNSF 25% of the proceeds, as allowed under the False Claims Act. Federal prosecutors previously declined to intervene in the case, and there have been no criminal charges brought against the clinic.

    The clinic’s attorneys appealed the jury’s verdict to the 9th U.S. Circuit Court of Appeals on Thursday. Clinic director Tracy McNew has said the facility could be forced into bankruptcy if forced to pay a multimillion-dollar judgement.

    McNew and Black did not immediately respond to messages Saturday seeking comment.

    The verdict also could harm the clinic’s reputation and potentially undermine lawsuits by asbestos victims against BNSF and others that courts have held liable for contamination that’s turned Libby into one of the nation’s deadliest polluted sites. BNSF operated a railyard in town through which asbestos-tainted vermiculite was transported from the nearby W.R. Grace Co. mine.

    Railway spokesperson Lena Kent said the clinic’s actions wasted taxpayer money while diverting resources from people in legitimate need.

    “The focus of this trial was on CARD’s treatment of the hundreds of people who were not sick,” Kent said. “It’s a sad chapter in this saga that this trial was necessary to restore the focus on those who are truly impacted and who should continue to have access to the benefits and care they deserve.”

    The Libby area was declared a Superfund site two decades ago following media reports that mine workers and their families were getting sick and dying due to hazardous asbestos dust.

    Health officials have said at least 400 people have been killed and thousands sickened from asbestos exposure in the Libby area.

    The clinic has certified more than 3,400 people with asbestos-related diseases and received more than $20 million in federal funding, according to court documents.

    Hampering the clinic’s defense in the false claims case was a ruling that barred testimony from former U.S. Sen. Max Baucus of Montana. Baucus helped craft a provision in the Affordable Care Act that made Libby asbestos victims eligible for government benefits. He’s said the clinic was acting in line with that law.

    Asbestos-related diseases can range from a thickening of a person’s lung cavity that can hamper breathing to deadly cancer.

    Exposure to even a minuscule amount of asbestos can cause lung problems, according to scientists. Symptoms can take decades to develop.

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  • Judge orders Montana health clinic to pay nearly $6 million over false asbestos claims

    Judge orders Montana health clinic to pay nearly $6 million over false asbestos claims

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    BILLINGS, Mont. — A health clinic in a Montana town plagued by deadly asbestos contamination must pay the government almost $6 million in penalties and damages after it submitted hundreds of false asbestos claims, a judge ruled.

    The 337 false claims made patients eligible for Medicare and other benefits they shouldn’t have received. The federally funded clinic has been at the forefront of the medical response to deadly pollution from mining near Libby, Montana

    The judgement against the Center for Asbestos Related Disease clinic comes in a federal case filed by BNSF Railway in 2019 under the False Claims Act, which allows private parties to sue on the government’s behalf.

    BNSF — which is itself a defendant in hundreds of asbestos-related lawsuits — alleged the center submitted claims on behalf of patients without sufficient confirmation they had asbestos-related disease.

    After a seven-person jury agreed last month, U.S. District Judge Dana Christensen said in a July 18 order that he was imposing a stiff penalty to prevent future misconduct.

    Christensen said he was concerned in particular that the clinic’s high-profile doctor, Brad Black, had diagnosed himself with asbestos-related disease and that a nurse gave a similar diagnosis to her own mother.

    The judge also cited evidence at trial of high rates of opioid prescriptions from the clinic for people who may not have had a legitimate asbestos-related diagnosis.

    The clinic demonstrated “a reckless disregard for proper medical procedure and the legal requirements of government programs,” the judge wrote.

    As instructed by the law, the judge tripled the $1.1 million in damages found by the jury, to almost $3.3 million, and imposed $2.6 million in additional penalties.

    The judge awarded BNSF 25% of the proceeds, as allowed under the False Claims Act. Federal prosecutors previously declined to intervene in the case, and there have been no criminal charges brought against the clinic.

    The clinic’s attorneys appealed the jury’s verdict to the 9th U.S. Circuit Court of Appeals on Thursday. Clinic director Tracy McNew has said the facility could be forced into bankruptcy if forced to pay a multimillion-dollar judgement.

    McNew and Black did not immediately respond to messages Saturday seeking comment.

    The verdict also could harm the clinic’s reputation and potentially undermine lawsuits by asbestos victims against BNSF and others that courts have held liable for contamination that’s turned Libby into one of the nation’s deadliest polluted sites.

    The Libby area was declared a Superfund site two decades ago following media reports that mine workers and their families were getting sick and dying due to hazardous asbestos dust.

    BNSF operated a railyard in town through which asbestos-tainted vermiculite was transported from the nearby W.R. Grace Co. mine.

    Health officials have said at least 400 people have been killed and thousands sickened from asbestos exposure in the Libby area.

    The clinic has certified more than 3,400 people with asbestos-related diseases and received more than $20 million in federal funding, according to court documents.

    Hampering the clinic’s defense in the false claims case was a ruling that barred testimony from former U.S. Sen. Max Baucus of Montana. Baucus helped craft a provision in the Affordable Care Act that made Libby asbestos victims eligible for government benefits. He’s said the clinic was acting in line with that law.

    Asbestos-related diseases can range from a thickening of a person’s lung cavity that can hamper breathing to deadly cancer.

    Exposure to even a minuscule amount of asbestos can cause lung problems, according to scientists. Symptoms can take decades to develop.

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  • Alzheimer’s drug Leqembi has full FDA approval now and that means Medicare will pay for it

    Alzheimer’s drug Leqembi has full FDA approval now and that means Medicare will pay for it

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    WASHINGTON — U.S. officials granted full approval to a closely watched Alzheimer’s drug on Thursday, clearing the way for Medicare and other insurance plans to begin covering the treatment for people with the brain-robbing disease.

    The Food and Drug Administration endorsed the IV drug, Leqembi, for patients with mild dementia and other symptoms caused by early Alzheimer’s disease. It’s the first medicine that’s been convincingly shown to modestly slow the cognitive decline caused by Alzheimer’s.

    Japanese drugmaker Eisai received conditional approval from the FDA in January based on early results suggesting Leqembi worked by clearing a sticky brain plaque linked to the disease.

    The FDA confirmed those results by reviewing data from a larger, 1,800-patient study in which the drug slowed memory and thinking decline by about five months in those who got the treatment, compared to those who got a dummy drug.

    “This confirmatory study verified that it is a safe and effective treatment for patients with Alzheimer’s disease,” said FDA’s neurology drug director, Dr. Teresa Buracchio, in a statement.

    The drug’s prescribing information will carry the most serious type of warning, indicating that Leqembi can cause brain swelling and bleeding, side effects that can be dangerous in rare cases. The label notes that those problems are seen with other plaque-targeting Alzheimer’s drugs.

    The process of converting a drug to full FDA approval usually attracts little attention. But Alzheimer’s patients and advocates have been lobbying the federal government for months after Medicare officials announced last year they wouldn’t pay for routine use of drugs like Leqembi until they receive FDA’s full approval.

    There were concerns that the cost of new plaque-targeting Alzheimer’s drugs could overwhelm the program’s finances, which provide care for 60 million seniors. Leqembi is priced at about $26,500 for a year’s supply of IVs every two weeks.

    The vast majority of Americans with Alzheimer’s get their health coverage through Medicare. And private insurers have followed its lead by withholding coverage for Leqembi and a similar drug, Aduhelm, until they receive FDA’s full endorsement. An FDA decision on full approval for Aduhelm is still years away.

    Medicare administrator, Chiquita Brooks-LaSure, said in a statement Thursday the program will begin paying for the drug now that it has full FDA approval. But the government is also setting extra requirements, including enrollment in a federal registry to track the drug’s real-world safety and effectiveness.

    Medicare “will cover this medication broadly while continuing to gather data that will help us understand how the drug works,” Brooks-LaSure said.

    Some Medicare patients could be responsible for paying the standard 20% of the cost of Leqembi, though the amount will vary depending on their plans and other coverage details.

    Hospitals and medical clinics have cautioned that it may take time to get people started on the drug.

    Doctors need to confirm that patients have the brain plaque targeted by Leqembi before prescribing it. Nurses need to be trained to administer the drug and patients must be monitored with repeated brain scans to check for swelling or bleeding. The imaging and administration services carry extra costs for hospitals beyond the drug itself.

    Eisai has told investors that about 100,000 Americans could be diagnosed and eligible to receive Leqembi by 2026. The drug is co-marketed with Cambridge, Massachusetts-based Biogen.

    “We want to ensure that appropriate patients only are the ones that get this product,” said Alexander Scott, a vice president with Eisai.

    Eisai studied the drug in people with early or mild disease who were evaluated using a scale measuring memory, thinking and other basic skills. After 18 months, those who got Leqembi declined more slowly — a difference of less than half a point on the scale — than participants who received a dummy infusion. Some Alzheimer’s experts say that delay is likely too subtle for patients or their families to notice.

    But federal health advisers said the difference could still be meaningful and recommended that FDA fully approve the drug at a public meeting in June.

    ___

    The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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  • Merck sues U.S. government over plan to negotiate Medicare drug prices, claiming

    Merck sues U.S. government over plan to negotiate Medicare drug prices, claiming

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    Drugmaker Merck is suing the U.S. government over its plan to allow Medicare to negotiate prices for a handful of drugs, calling it “extortion.”

    The plan, part of the 2022 Inflation Reduction Act, is expected to save taxpayers billions of dollars on common drugs the government pays for. The law directs the Center for Medicare and Medicaid Services to select 10 drugs with no generic or biosimilar equivalents to be subject to government price negotiation. (The list will eventually expand to 20 drugs.) 

    In its lawsuit, filed on Tuesday in federal court in the District of Columbia, Merck called the program “a sham” that “involves neither genuine ‘negotiations’ nor real ‘agreements.’” Instead, the pharmaceutical firm said the U.S. Department of Health and Human Services selects drugs to be included and then dictates a discount, threatening drugmakers with “a ruinous daily excise tax” if they refuse the conditions.

    Merck added that it expects its diabetes treatment, Januvia, to be subject to negotiation in the first round, with diabetes drug Janumet and the cancer drug Keytruda affected in later years.

    The Rahway, New Jersey-based drugmaker is seeking to end the program. “It is tantamount to extortion,” it said in the complaint.

    Health and Human Services Secretary Xavier Becerra, who is named as a defendant in the suit, said in a statement that the agency plans to “vigorously defend” the drug price negotiation plan.

    “The law is on our side,” he said.


    How to choose the right Medicare plan for you

    03:35

    The lawsuit also names HHS and Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, as defendants.

    Merck said the program violates elements of the Constitution, including the Fifth Amendment’s requirement that the government pays “‘just compensation’ if it takes ‘property’ for public use,” according to the complaint.

    The drugmaker noted that Congress could have simply allowed HHS to state a maximum price it would pay for a drug, but that would have enabled drugmakers to walk away from talks, leaving millions of Medicare beneficiaries without essential medications, the complaint said.

    Instead, Merck said the government uses the threat of severe penalties to requisition drugs and refuses to pay fair value, forcing drugmakers “to smile, play along, and pretend it is all part of a ‘fair’ and voluntary exchange.” This violates the First Amendment, the suit claims, calling the process “political Kabuki theater.”

    Patient advocate slams Merck

    David Mitchell, founder of the advocacy group “Patients For Affordable Drugs Now,” slammed Merck’s suit as an attempt to “unilaterally set prices that are untethered to quality at the expense of patients.”

    “The reality is, drug corporations that are subject to Medicare’s new authority – and who already negotiate with every other high income country in the world – will engage in a negotiation process after setting their own launch prices and enjoying nine years or more of monopoly profits,” Mitchell said in a statement.

    He added, “Medicare negotiation is a desperately needed, long-awaited rebalancing of our drug price system that will help millions of patients obtain the medications they need at prices they can afford while ensuring continued innovation.” 

    Medicare is the federally funded coverage program mainly for people who are age 65 and older. Currently, drug companies tell Medicare how much a prescription costs, leaving the federal government and Medicare beneficiaries to pay up.

    The Inflation Reduction Act’s drug negotiation provisions mark the first time that the federal government will bargain directly with drug companies over the price they charge for some of Medicare’s costliest drugs. Government negotiation with drugmakers and price caps on drugs are common in other developed nations.

    Republican lawmakers have also criticized President Joe Biden’s administration over the drug pricing plan, saying it could deter drugmakers from developing new treatments.

    The federal government is expected to soon release rules for negotiating drug prices. In September, it is scheduled to publish a list of 10 drugs that it will start price negotiations on next year. Negotiated prices won’t take hold until 2026.

    With reporting by the Associated Press.

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  • Debt ceiling talks could hinge on budget cuts. Here’s where the U.S. spends its money.

    Debt ceiling talks could hinge on budget cuts. Here’s where the U.S. spends its money.

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    A key element of the debt ceiling negotiations in Washington, D.C., are demands from Republican lawmakers that the nation chop federal spending, including outlays that ballooned during the pandemic. 

    The push for cuts comes as the U.S. has been spending more each year than it has received in taxes and other revenue since 2001, when President Bill Clinton left the White House. During the pandemic, spending and deficits surged, thanks to the double whammy of President Donald Trump’s 2017 tax cuts in addition to spending on emergency measures like stimulus checks and unemployment aid. 

    Government spending spiked to a high of $7.2 trillion annually in fiscal-year 2021, the year that Trump left the White House, or about 78% higher than the nation’s spending just four years earlier, according to data from the University of California, Santa Barbara. Since then, federal outlays have dropped, but the nation is still spending trillions more annually than it did prior to the pandemic.

    “Look, this all comes down to spending,” House Speaker Kevin McCarthy told reporters on Wednesday. “We need to spend less this year than we spent last year. It’s simple.”

    While Republicans want the government to spend less, they have pledged not to touch two of the biggest expenditures: Social Security and Medicare. Those programs provide retirement income and health care services to millions of Americans over the age of 65 and represent more than 30% of U.S. spending.

    Cuts to defense spending are also off the table, which accounts for about 12% of the nation’s outlays. Instead, the spending cuts pushed by GOP leaders are focused on Medicaid — the health care program for low-income Americans — as well as on food stamps and welfare. 

    The GOP plan would add work requirements to Medicaid for the first time and expand them for the Supplemental Nutrition Assistance Program, the formal name for the food-stamp program and for Temporary Assistance for Needy Families (TANF), or welfare.

    Over the next decade, those cuts would add up to about $120 billion in savings, according to the Congressional Budget Office. The reduced spending would stem from kicking thousands of people out of the programs. Combined, Medicaid, SNAP and TANF represent about 7% of U.S. spending, or about 13% of spending on individuals.

    In the short term, those cuts in aid could potentially backfire by contributing to a recession this year, some financial experts say. That’s because the reductions would be directed at programs where federal money is redirected into the economy through food purchases and health care services. Without that spending, local businesses could take a hit.

    “Austerity connected to the compromises suggested above would contribute to the moderate recession we expected this year,” said analysts from Wells Fargo Investment Institute in a research note.

    But, they added, there’s also a risk to the nation’s financial health if the U.S. isn’t able to trim its spending. If the U.S. needs to issue more debt to finance its spending, that would result in higher interest expense for the nation — potentially spurring Congress to cut spending or raise taxes to compensate, the analysts noted.

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  • What happens if the U.S. defaults? How the debt ceiling could impact your money.

    What happens if the U.S. defaults? How the debt ceiling could impact your money.

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    Time is running out to reach a deal to avert a historic default on the nation’s debt, with Treasury Secretary Janet Yellen warning that the U.S. could run out of money to pay the bills by June 1. On Friday, negotiations broke down between the White House and Republican lawmakers as the sides seemingly hit an impasse.

    Breaching the debt ceiling may sound esoteric, but financial experts warn it could hurt Americans financially in a number of ways. Here’s what to know. 

    What is the debt ceiling?

    The debt ceiling, which is set by Congress, represents the maximum amount the federal government can borrow to pay its debts. Raising the debt ceiling doesn’t authorize new spending, but allows the government to fund its previously approved obligations, ranging from Social Security payments to military salaries. 

    Failing to raise the debt ceiling is “like going to a restaurant, looking at the menu, seeing how much everything costs and by the time you get the check, saying, ‘Never mind, I can’t pay this much,’” said Jacob Channel, senior economist at LendingTree. 

    Has the U.S. ever breached the debt ceiling?

    No, although it’s come close several times before, most notably in 2011, when lawmakers agreed to raise the debt limit just days before the nation was about to exhaust its borrowing capacity. That led credit ratings agency Standard & Poor’s to downgrade U.S. debt for the first time. The stock market tumbled, with the Dow shedding 17% in the weeks surrounding the crisis.

    “It’s hard to overstate how bad it would be,” Channel said.

    How would a debt-ceiling breach impact my 401(k)?

    A default would rock global financial markets, spurring many investors to sell their stocks and bonds. Prices would plummet, although it’s unknown how severe the hit would be given that the U.S. has never been in such a situation.

    “There is a great chance that there is meaningful disruption to the U.S. financial markets” if a breach occurs, noted Tony Roth, chief investment officer at Wilmington Trust. “You’d find the entire country would be up in arms, frankly, by the disruption that it would cause in the financial markets.”

    Would I still get my Social Security payment?

    Social Security recipients might not get their checks on time, according to experts. With 66 million recipients, such a delay is likely to create financial hardship for many, especially seniors and other Americans who rely on Social Security as their main source of income.

    If the U.S. defaults, “It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security,” Yellen said in April.

    Would federal employees get paid?

    As Yellen noted, federal workers and members of the armed services might not get paid. The U.S. would need to decide what payments to prioritize with what money it still has available, and it could opt to continue paying interest on its bonds in order to avoid a debt downgrade rather than pay federal salaries.

    “It could be they decide, ‘Hey, we aren’t going to pay any government employees this week,’” noted Patrick Gourley, associate professor of economics at the University of New Haven, in an interview with Government Executive, a publication that covers the federal government.

    What happens to Medicare and Medicaid?

    Both could be disrupted, potentially impacting care for older Americans on Medicare and low-income households that rely on Medicaid. A combined 158 million people are enrolled in Medicare and Medicaid — almost half the U.S. population.

    “Get your health care now. Don’t wait until June 1,” Sara Rosenbaum, a health law and policy professor at George Washington University, told Axios. “My message to the world is, don’t wait on that orthopedic surgery.”

    Would it impact my credit cards?

    A breach would likely raise the broader cost of borrowing by pushing up interest rates, including on credit cards.

    That would hurt. Credit card annual percentage rates are already at record highs, reaching almost 21%, the highest level since the Federal Reserve began tracking APRs in 1994. And consumers already owe almost $1 trillion on their charge cards, up 17% jump from last year and a record high.

    How would a debt-ceiling breach impact mortgage rates?

    It could get even more expensive to buy a home because a default would force the Treasury Department to pay higher interest on its bonds to convince investors to stick around — and mortgage rates and other borrowing costs tend to follow Treasury rates.

    Mortgage rates could surge to 8.4% by September, up from 6.9% now, if the debt ceiling is exceeded, according to Zillow. That would make a mortgage payment on a typical home 22% more expensive and likely “freeze” the market, the real estate company said.

    Would the U.S. fall into a recession?

    Even a short debt-ceiling breach of a week or less would likely tip the economy into a recession, Mark Zandi, chief economist of Moody’s Analytics, said in a recent report. A short breach would be “enough to undermine the already fragile U.S. economy,” Zandi wrote. 

    But if the breach lasted longer than that, the U.S. could fall into a “deep recession,” with employers cutting 7.8 million jobs and the jobless rate jumping to 8%, or about double its current level, Zandi predicted.

    How long could a debt-ceiling breach last?

    Given the disruption — which would impact anyone with a 401(k) or who relies on government programs — it’s likely that the uproar would force the White House and Congress back to the negotiating table to quickly find a solution, experts say. 

    “If we have a default, the dislocation would be so great that the default wouldn’t last long because the pressure would be so intense to fix the situation,” Roth of Wilmington Trust said. “It would only last a couple of days.”

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  • Time is running out to raise the U.S. debt ceiling — here’s how it could impact your money

    Time is running out to raise the U.S. debt ceiling — here’s how it could impact your money

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    Time is running out to reach a deal to avert a historic default on the nation’s debt, with Treasury Secretary Janet Yellen warning that the U.S. could run out of money to pay the bills by June 1. Breaching the debt ceiling may sound esoteric, but financial experts warn it cause hurt Americans financially in a number of ways. Here’s what to know. 

    What is the debt ceiling?

    The debt ceiling, which is set by Congress, represents the maximum amount the federal government can borrow to pay its debts. Raising the debt ceiling doesn’t authorize new spending, but instead allows the government to fund its previously approved obligations, ranging from Social Security payments to military salaries. 

    Failing to raise the debt ceiling is “like going to a restaurant, looking at the menu, seeing how much everything costs and by the time you get the check, saying, ‘Never mind, I can’t pay this much’,” said Jacob Channel, senior economist at LendingTree. 

    Has the U.S. ever breached the debt ceiling?

    No, although it’s come close several times before, most notably in 2011, when lawmakers agreed to raise the debt limit just days before the nation was about to exhaust its borrowing capacity. That led credit ratings agency Standard & Poor’s to downgrade U.S. debt for the first time. The stock market tumbled, with the Dow shedding 17% in the weeks surrounding the crisis.

    “It’s hard to overstate how bad it would be,” Channel said.

    How would a debt ceiling breach impact my 401(k)?

    A default would rock global financial markets, spurring many investors to sell their stocks and bonds. Prices would plummet, although it’s unknown how severe the hit would be given that the U.S. has never been in such a situation.

    “There is a great chance that there is meaningful disruption to the U.S. financial markets” if a breach occurs, noted Tony Roth, chief investment officer at Wilmington Trust. “You’d find the entire country would be up in arms, frankly, by the disruption that it would cause in the financial markets.”

    Would I get my Social Security payment?

    Social Security recipients might not get their checks on time, according to experts. With 66 million recipients, such a delay is likely to create financial hardship for many, especially seniors and other Americans who rely on Social Security as their main source of income.

    If the U.S. defaults, “It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security,” Yellen said in April.

    Would federal employees get paid?

    As Yellen noted, federal workers and members of the armed services might not get paid. The U.S. would need to decide what payments to prioritize with what money it still has available, and it could opt to continue paying interest on its bonds in order to avoid a debt downgrade rather than pay federal salaries.

    “It could be they decide, ‘Hey, we aren’t going to pay any government employees this week’,” noted Patrick Gourley, associate professor of economics at the University of New Haven, in an interview with Government Executive, a publication that covers the federal government.

    What happens to Medicare and Medicaid?

    Both could be disrupted, potentially impacting care for older Americans on Medicare and low-income households that rely on Medicaid. A combined 158 million people are enrolled in Medicare and Medicaid — almost half the U.S. population.

    “Get your health care now. Don’t wait until June 1,” Sara Rosenbaum, a health law and policy professor at George Washington University, told Axios. “My message to the world is, don’t wait on that orthopedic surgery.”

    Would it impact my credit cards?

    A breach would likely raise the broader cost of borrowing by pushing up interest rates, including on credit cards.

    That would hurt. Credit card annual percentage rates are already at record highs, reaching almost 21%, the highest level since the Federal Reserve began tracking APRs in 1994. And consumers already owe almost $1 trillion on their charge cards, up 17% jump from last year and a record high.

    How would a debt ceiling breach impact mortgage rates?

    It could get even more expensive to buy a home because a default would force the Treasury Department to pay higher interest on its bonds to convince investors to stick around — and mortgage rates and other borrowing costs tend to follow Treasury rates.

    Mortgage rates could surge to 8.4% by September, up from 6.9% now, if the debt ceiling is exceeded, according to Zillow. That would make a mortgage payment on a typical home 22% more expensive and likely “freeze” the market, the real estate company said.

    Would the U.S. fall into a recession?

    Even a short debt ceiling breach of a week or less would likely tip the economy into a recession, Mark Zandi, chief economist of Moody’s Analytics, said in a recent report. A short breach would be “enough to undermine the already-fragile U.S. economy,” Zandi wrote. 

    But if the breach lasted longer than that, the U.S. could fall into a “deep recession,” with employers cutting 7.8 million jobs and the jobless rate jumping to 8%, or about double its current level, Zandi predicted.

    How long could a debt ceiling breach last?

    Given the disruption — which would impact anyone with a 401(k) or who relies on government programs — it’s likely that the uproar would force the White House and Congress back to the negotiating table to quickly find a solution, experts say. 

    “If we have default, the dislocation would be so great that the default wouldn’t last long because the pressure would be so intense to fix the situation,” Roth of Wilmington Trust said. “It would only last a couple of days.”

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  • Feds: Hospitals that denied emergency abortion broke the law

    Feds: Hospitals that denied emergency abortion broke the law

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    WASHINGTON — Two hospitals that refused to provide an emergency abortion to a pregnant woman who was experiencing premature labor put her life in jeopardy and violated federal law, a first-of-its-kind investigation by the federal government has found.

    The findings, revealed in documents obtained by The Associated Press, are a warning to hospitals around the country as they struggle to reconcile dozens of new state laws that ban or severely restrict abortion with a federal mandate for doctors to provide abortions when a woman’s health is at risk. The competing edicts have been rolled out since the Supreme Court overturned the constitutional right to an abortion last year.

    But federal law, which requires doctors to treat patients in emergency situations, trumps those state laws, the nation’s top health official said in a statement.

    “Fortunately, this patient survived. But she never should have gone through the terrifying ordeal she experienced in the first place,” Health and Human Services Secretary Xavier Becerra said. “We want her, and every patient out there like her, to know that we will do everything we can to protect their lives and health, and to investigate and enforce the law to the fullest extent of our legal authority, in accordance with orders from the courts.”

    The federal agency’s investigation centers on two hospitals — Freeman Health System in Joplin, Missouri, and University of Kansas Hospital in Kansas City, Kansas — that in August refused to provide an abortion to a Missouri woman whose water broke early at 17 weeks of pregnancy. Doctors at both hospitals told Mylissa Farmer that her fetus would not survive, that her amniotic fluid had emptied and that she was at risk for serious infection or losing her uterus, but they would not terminate the pregnancy because a fetal heartbeat was still detectable.

    Ultimately, Farmer had to travel to an abortion clinic in Illinois.

    “It was dehumanizing. It was terrifying. It was horrible not to get the care to save your life,” Farmer, who lives in Joplin, said of her experience. “I felt like I was responsible to do something, to say something, to not have this happen again to another woman. It was bad enough to be so powerless.”

    Farmer’s complaints launched the first investigations that the Centers for Medicare & Medicaid Services, or CMS, has publicly acknowledged since Roe v. Wade was overturned last year. Across the country, women have reported being turned away from hospitals for abortions, despite doctors telling them that this puts them at further risk for infection or even death.

    President Joe Biden’s administration has prodded hospitals not to turn away patients in those situations, even when state law forbids abortions. Weeks after the Supreme Court’s ruling, the Democratic administration reminded hospitals that federal law requires them to offer an abortion when a pregnant woman is at risk for an emergency medical condition. The federal government can investigate hospitals that receive Medicare and Medicaid money — which encompasses most facilities in the U.S. — for violations of the law.

    Abortions are largely banned in Missouri, but there are exceptions for medical emergencies. In Kansas, when Farmer visited the hospital, abortions were still legal up to 22 weeks. It’s unclear why University of Kansas Health refused to offer Farmer one. Neither hospital immediately provided comment on the case.

    CMS has not announced any fines or other penalties against the two hospitals in its investigation, but it did send them notices warning that they were in violation of the law and asking them to correct the problems that led to Farmer being turned away. Federal Medicare investigators will follow up with the hospitals before closing the case.

    That likely won’t be enough to convince hospitals and doctors that they should provide abortions in states where they’re operating under the threat of prison time or large fines if they terminate a pregnancy, said Mary Ziegler, a law professor at the University of California, Davis.

    “I don’t know how much this approach really helps matters. The possibility of being criminalized for providing care is still there for a lot of these doctors,” Ziegler said. “The incentive here would be to do nothing. The incentive here would be to turn the patient away.”

    Nationwide, doctors have reported uncertainty around how to provide care to pregnant women, especially in the nearly 20 states where new laws have banned or limited the care. Doctors face criminal and civil penalties in some states for aborting a pregnancy.

    But in a letter sent Monday to hospital and doctors’ associations that highlights the inquiries, Becerra said he hopes the investigations clarify that the organizations must follow the federal law, the Emergency Medical Treatment and Labor Act, or EMTALA.

    “While many state laws have recently changed,” Becerra wrote, “it’s important to know that the federal EMTALA requirements have not changed, and continue to require that health care professionals offer treatment, including abortion care, that the provider reasonably determines is necessary to stabilize the patient’s emergency medical condition.”

    ___

    Follow the AP’s coverage of abortion at https://apnews.com/hub/abortion.

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  • 5 money-saving tips for seniors this tax season

    5 money-saving tips for seniors this tax season

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    More than half of older taxpayers (57%) are worried they’ll have to pay more taxes this year because of the 5.9% Social Security cost-of-living adjustment in 2022, according to a January survey by The Senior Citizens League, a nonpartisan seniors group.

    Taxes for the over-65 set can feel more complicated for a variety of reasons: There are often multiple streams of income, some retirees still work part time, and people may be managing required minimum distributions from retirement accounts.

    “It can happen that people have more income in their later life than they did when they were working,” said Barbara O’Neill, a certified financial planner in Ocala, Florida, and the author of “Flipping a Switch: Your Guide to Happiness and Financial Security in Later Life.”

    For older adults, here are some items to keep in mind this tax season:

    1. Income tax brackets matter

    Your income can affect your Medicare Part B and Part D premiums in the future because of the income-related monthly adjustment amount, or IRMAA. Medicare premiums are based on your tax return from two years prior, and you may have to pay more if your income exceeds certain thresholds.

    These IRMAA surcharges can be difficult to manage “because they operate as a cliff, not a phase-in,” said  Edward Jastrem, a certified financial planner in Westwood, Massachusetts. “For example, if you are $1 over an income tier, you are subject to the full surcharge.”

    In 2023, people filing individually with a modified adjusted gross income of more than $97,000 in 2021 — or jointly with more than $194,000 — will pay higher monthly amounts for Medicare. “Tax bracket management becomes crucial in later life,” O’Neill said.


    401(k) early withdrawals and the impact on savings

    03:52

    2. RMDs: A win-win for charity and for you

    At age 73, you are required by the IRS to start taking required minimum distributions from tax-deferred retirement accounts. But once you hit age 70 1/2, you can have some or all of your required minimum distributions sent directly to a charity of your choice. This move will still count as a required minimum distribution, but the amount isn’t added to your taxable income.

    “If you take a regular RMD from your IRA, it gets added to your adjusted gross income for tax purposes,” says Ian Weinberg, a certified financial planner in Woodbury, New York. “It usually throws you into a higher bracket.”

    Sending money directly to charity is called a qualified charitable distribution, and you can do this with up to $100,000 of your annual required minimum distributions.

    3. Side hustlers can deduct Medicare premiums

    About 1 in 4 adults 50 and older say they’re doing gig work or freelancing, according to a January survey from AARP.

    If you’re doing gig work, that counts as business income — which means you can deduct business expenses. This includes health insurance premiums if you’re paying for your own insurance. “Self-employed older adults on Medicare can deduct Medicare premiums for themselves and their spouses against business income,” O’Neill said.

    Other deductible expenses may include business supplies, home office costs and advertising expenses, which may include costs to run a website.

    4. Social security may be taxable

    Many people don’t realize that Social Security benefits are taxable if your income meets certain thresholds. “That takes people by surprise,” said Nadine Burns, a certified financial planner in Ann Arbor, Michigan.

    The taxable portion of your Social Security benefits is based on your combined income, which is the total of your adjusted gross income, nontaxable interest and half of your Social Security benefits. If you’re filing taxes as an individual and your combined income is over $25,000 — or over $32,000 if you’re filing a joint return — you may pay income tax on up to 50% to 85% of your benefits.

    5. State tax breaks may be available

    Your state may offer tax deductions or credits for retirees, so do some research. In South Carolina, for instance, all military retirement pay and Social Security income is exempt from state taxes, said Stephen Maggard, a certified financial planner in Columbia, South Carolina. Plus, he says, there’s a separate deduction for those over age 65.


    Millions of Americans nearing retirement without savings

    02:22

    In Ohio, retirees may be eligible for credits based on retirement income or their age — there’s a senior citizen credit for taxpayers who were 65 or older during the tax year. Colorado offers an income tax credit of up to $1,000 to residents 65 and up if they meet income requirements. Check with your state tax department to see what’s possible.

    This article was provided to The Associated Press by the personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Kate Ashford is a writer at NerdWallet. 

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