x
Breaking News
More () »

Phoenix's Leading Local News: Weather, Traffic, Sports and more | Phoenix, Arizona | 12NEWS.com

VERIFY: Why Trump’s $200 Medicare discount cards are under question

Several governmental departments will have to approve the proposal before the discount cards can be dispersed.
Credit: Getty Images/iStockphoto

On Sept. 24, President Donald Trump proposed sending $200 Medicare drug discount cards to seniors. Because the proposal was announced so close to the presidential election on Nov. 3, questions were raised around the legality of the plan.

In fact, House Democrats requested internal documents regarding the proposal directly related to questions about its legality. They believe it could violate federal election law.

THE QUESTION

Does President Trump’s plan for $200 Medicare drug discount cards violate election law?

THE ANSWER

It might, although it’s unclear whether the proposal is under federal review for that reason.

WHAT WE FOUND

The Medicare drug discount card plan could be on shaky ground.

The Federal Election Commission told VERIFY: “It appears that this matter includes allegations of federal corruption and vote buying. These issues would be handled by the Department of Justice.” 

The Justice Department has not responded to VERIFY inquiries on whether it is performing a review.

If the discount card plan moves forward and past the Justice Department, it still faces review by the U.S. Office of Management and Budget, according to Stacie Dusetzina, an associate professor of health policy at the Vanderbilt University School of Medicine. There, the $8 billion cost of the proposal may run into roadblocks. Just mailing a letter to inform seniors about the program would cost $19 million, she said. The funding would come from the Medicare trust fund, which is already predicted to run out of money by 2031 unless shored up. 

Typically, Congress controls the purse strings on such expenditures, but the discount card plan gets around that by being crafted as a demonstration project. It's an experiment to show that the plan would save money, Dusetzina said. 

In this case, the theory is that if people have their out-of-pocket medical costs covered, they are more likely to have good health outcomes. But that’s already been proven, she said, calling it “unconscionable to me as a researcher” to fund the cards this way.

The question becomes whether this is the best use of money for Medicare recipients, Dusetzina said. Rather than a one-time discount card, a better approach would be to put incentives in place that result in drug companies keeping prices down, she said.