V-BID Update: Medicare Drug Policy Shifts, Patient Cost Exposure Grows

In this Issue:

• Register Now! 2026 V-BID Summit
• Working families spend nearly $4,000 annually on health care: Study
• Out-of-Pocket Spending for Biologic Drugs After Biosimilar Competition for Medicare Patients
• Medicare Recipients to Lose Access to Service at End of the Month
• Spreading Drug Costs Over the Year May Ease Financial Burden for Medicare Cancer Patients
• Growth In National Health Expenditures: It’s Not The Prices, Stupid
• AI Scribes Improve Productivity, May Raise Health Care Costs

Working Families Spend Nearly $4K Annually on Health Care: Study

According to a new analysis by the Center for Economic and Policy Research using 2024 Census data, median health care spending for working families in the U.S. is just under $4,000 per year, including premiums and out-of-pocket expenses. A notable share of families spend more than 10% of income on health care, reinforcing concerns about affordability and the need for policy solutions to reduce financial strain.

Out-of-Pocket Spending for Biologic Drugs After Biosimilar Competition for Medicare Patients

In this cross-sectional analysis of Medicare Advantage beneficiaries, OOP spending for high-cost biologic drugs declined following the introduction of biosimilar competitors, dropping from a mean of $233 to $165 per year over four years. The results indicate that biosimilar competition is associated with lower patient cost-sharing, particularly for those with coinsurance or deductible obligations.

Medicare Recipients May Lose Access to Telehealth Service at End of the Month

Medicare’s expanded telehealth coverage, introduced during the COVID-19 pandemic, will largely end January 30, with exceptions for behavioral health services and beneficiaries in rural areas. Some services will be covered, such as care for patients with end-stage renal disease and care for patients with acute stroke symptoms. Read more.

Spreading Drug Costs Over the Year May Ease Financial Burden for Medicare Cancer Patients

A new study published in the Journal of Clinical Oncology reported that enrollment in the Medicare Prescription Payment Plan (M3P) — an opt-in policy implemented in 2025 under the Inflation Reduction Act that allows beneficiaries to spread out of pocket (OOP) costs over the calendar year — could substantially reduce monthly payment volatility and help mitigate cost-related non-adherence, although uptake remains extremely low, limiting its potential benefits.

Growth In National Health Expenditures: It’s Not The Prices, Stupid

In a recent Health Affairs Forefront article, Michael Chernew comments “…There was virtually no excess medical inflation (medical inflation above general inflation) for 2023 or 2024. In fact, prices for retail drugs (net of rebates) rose at a rate below inflation. There will certainly be cases of rising prices driving spending, but on average, price growth is not the problem.”

AI Scribes Improve Productivity, May Raise Health Care Costs

Ambient AI scribes, which draft clinical notes from patient-clinician conversations, are shown to raise physician productivity, according to a study published in JAMA Network Open. Physicians using AI scribes saw increased relative value units and patient encounters, translating to higher Medicare revenue. Despite these gains, a JAMA Health Forum policy analysis cautions that widespread adoption could raise health care costs, as AI scribes might encourage “higher-intensity billing.”

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