Trump aims to reduce drug costs under Medicare

FILE - In this Friday, Oct. 6, 2017, file photo, President Donald Trump speaks during a Hispanic Heritage Month event in the East Room of the White House, in Washington. The White House is finalizing an executive order that would expand health plans offered by associations to allow individuals to pool together and buy insurance outside their states, a unilateral move that follows failed efforts by Congress to overhaul the health care system. A senior administration official said Sunday, Oct. 8, that Trump was expected to sign the executive order next week. (AP Photo/Evan Vucci, File)

WASHINGTON (AP) – President Donald Trump is proposing to lower prescription drug costs for Medicare beneficiaries by allowing them to share in rebates that drug companies pay to insurers and other middlemen.

A senior administration official outlined the plan on condition of anonymity Thursday ahead of the release of Trump’s 2019 budget plan next week.

Pharmaceutical companies now pay rebates to insurers and pharmacy benefit managers to help their medications gain a bigger slice of the market.

Insurers apply savings from rebates to keep premiums more manageable.

Under Trump’s proposal, seniors covered by Medicare’s “Part D” prescription benefit would be able to share in the rebates for individual drugs that they purchase at the pharmacy.

The plan also expands Medicare’s “catastrophic” drug benefit so many seniors with very high costs would not face co-payments.

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