Joyce Rogers, AARP's senior vice president for government affairs, said the legislation requires prescription drug manufacturers to provide rebates for drugs provided to Medicare Part D low-income subsidy beneficiaries, including those who are dually eligible for Medicare and Medicaid.
"Medicare Part D benefit costs are projected to grow at an average annual rate of almost 10 percent through 2021, significantly faster than GDP. Unlike Medicare Part A, which is financed primarily through payroll taxes, Medicare Part D is funded through a combination of premiums and general revenue," Rogers wrote in the letter.
"As Part D spending increases, so does the cost burden shouldered by enrollees and taxpayers. The Medicare Drug Savings Act would provide a significant financial benefit to the Part D program."
AARP understands the important need to spend Medicare dollars wisely and to reduce the nation's spending on healthcare generally, Rogers said.
However, AARP wants to ensure that Congress does not simply ask seniors to pay more or enact harmful cuts to Medicare benefits.
Consequently, AARP is encouraged by the legislation, which instead focuses on constructively reducing costs, saving as much as $141 billion over the next 10 years without negatively impacting Medicare Part D benefits, the letter said.