WASHINGTON (CN) — Undercutting a promise from the Trump administration that the move will save taxpayers money, the nonpartisan Congressional Budget Office reported Thursday that Americans will pay $177 billion over the next 10 years to reduce how much Medicare beneficiaries spend on prescription drugs.
A federal agency in the legislative branch that provides budget and economic information to Congress, the Congressional Budget Office released its figures as part of a series of reports analyzing U.S. policy costs under the assumption they stay in place for the next 10 years.
The Trump administration is set to roll out its new Medicare plan, with the predicted $177 billion taxpayer cost hike, next year. Though drugmaker rebates currently go to insurance companies when patients fill their prescriptions, the new plan would send those rebates directly to seniors in the Medicare prescription drug benefit program.
Experts at the CBO called it unlikely that drug companies would lower the cost of drugs in response to the plan, electing instead to reimburse pharmacies for discounts they provide seniors as they fill their prescriptions drugs.
The net result of this, according to Thursday’s report, is a probable increase in health care premiums, which, for Medicare-enrolled seniors, are usually subsidized by the government by 75%.
This would lead to a $170 billion increase in Medicare spending between 2020-2029, the CBO’s report predicts.