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Part IV: Prescription drug blame game
Key Points
- Medicare prescription-drugs have skyrocketed 89% in Georgia from 2013 to 2019.
- Prices for common medications in Georgia have also ballooned during that time.
- Cost transparency is lacking even from state government as key prescription-drug players blame each other.
The inability of many people in Georgia to pay for prescription drugs also hits local independent pharmacists like Chelley Williams, who opened a pharmacy in Douglas County in 2015.
A constant source of trouble was penalties Williams faced when patients skipped picking up prescriptions because they could not afford them, she said. Each time that happened, she lost out on a chunk of the reimbursements that pharmacies receive to fill prescriptions, she said. The practice caused Williams’ pharmacy to hemorrhage money, forcing her to shut down in 2019.
“It was kind of a vicious cycle,” Williams said in a recent interview. “In the end, the patient loses. They’re paying more.”
Williams traced much of her pharmacy’s financial issues to companies called pharmacy benefit managers that act as intermediaries between health plans and drugmakers to negotiate medication costs. Critics argue most pharmacy benefit managers worsen drug prices rather than help lower them. They point to a complicated system of drug discounts and how medications are ranked on certain lists that pharmacy benefit managers influence as the root of recent rising prices.
Rebates that go to pharmacy benefit managers to help lower the overall costs of prescription drugs often never made it to patients’ pockets, offering little relief for Georgia patients when medication costs crop up that their plans don’t cover, said Greg Reybold, the general counsel with the Georgia Pharmacy Association.
“When (pharmacy benefit managers) are acting at their worst, they’re able to exploit drug markets at a massive scale,” Reybold said in a recent interview. “They’ve monetized every side of it.”
For their part, many pharmacy benefit managers point the finger right back at drugmakers who they claim set the initial cost for medications too high and push more expensive brand-name drugs when cheaper alternatives exist. Many pharmacy benefit managers also accuse independent pharmacies of being profit-driven when pushing for recent regulations in Georgia that they claim limit their ability to negotiate drug prices and secure discounts from drugmakers to drive down the final cost of medications.
“Any assertion that (pharmacy benefit managers) are raising drug costs is completely false,” said Greg Lopes, a senior vice president with Pharmaceutical Care Management Association. “(Pharmacy benefit managers) are the one member of the (prescription-drug) supply and payment chain working to reduce costs.”
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Putting long lines in the rearview: driver services continues technology update
The Gist
The days of standing in long lines to get or renew a driver’s license may soon be in the rearview mirror for good.
Over the next month, Georgia drivers will continue to see significant updates in services as the Georgia Department of Driver Services continues its push to modernize through state-of-the-art technology and to cut back on long wait times caused by a shortage of workers and backlogs due to Covid-19.
What’s Happening
The department will roll out about 20 kiosks in its metro Atlanta offices where motorists can get or renew driver’s licenses, replace lost or stolen ones and record address changes. The rollout is a pilot program and will be extended to the rest of the state later, department spokesperson Susan Sports told State Affairs.
At the same time, the kiosks you use at Kroger and Publix to renew your car tags “are being updated and modified to add the driver’s license [renewal services] to them,” Sports said. Initially, those kiosks will renew licenses and ID cards. More services will be added later. The grocery store kiosks are run by the state Department of Revenue.
Driver services has also taken steps to make traveling easier for Georgians.
The department now allows Georgians to add their driver’s license or state ID to Apple Wallet on iPhone and Apple Watch, making check-in at airports quick, easy and secure. It is not intended as a replacement for a physical copy of your license or ID but it can speed up the process at TSA checkpoints. Android users will soon have a similar option, Sports said. Georgians meanwhile also have the option of renewing their driver’s license online.
Despite the online presence, some people still prefer to come into the office, Sports said. Now, they’ll have the option of using a self-serve kiosk rather than having to stand in a long line.
Why It Matters
The state is spending close to $2 million to add the kiosks and update services for Georgia drivers, an initiative driven by fewer department staff and greater demand for quicker services.
“The kiosks especially should help with the agency’s workforce issues,” DDS Commissioner Spencer R. Moore said. “If you have a self-service kiosk that is handling that renewal customer coming in, not having to take a break or a lunch or take vacation, it’s going to really offset some of those staffing challenges that we have.”
The new technology isn’t just for giving short-handed staff some help. It also is intended to head off a potential rise in wait times once a round of license expirations kicks in over the next two years, Sports said.
“Having a self-service kiosk option will save wait time for customers,” she said. “In turn, the driver examiners will be able to assist those customers that cannot be served in any way but in person. It will save customers time because if they use the kiosk, they do not have to fill out the required ‘application for service’ or take a ticket number for service as is required for all customers visiting in person.”
While as many as 45 Department of Motor Vehicle agencies in the United States were using some type of self-service kiosks in 2021, there is still a large number of government agencies that have not yet taken advantage of the technology, according to Kiosk Marketplace.
What’s Next?
Meanwhile in Georgia, the Department of Driver Services’ kiosks are currently wrapping up the test phase, Sports said, and should be rolling out over the next 30 days at the 65 DDS offices statewide and in grocery stores.
“That’s the wave of the future and our customers are on the go. They want more options,” said Sports. “In the old days, you’d go to the DDS and you would take a lounge chair and you’d take a book and you knew you were going to be there all day. So now … our service goal statewide is less than 30 minutes.”
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Header image: City of Warner Robins former Police Chief John Wagner poses with a Georgia driver’s license. (Credit: Georgia Department of Drivers Services)
Lawmakers plan another run at rent control legislation
The Gist
ATLANTA — Skyrocketing rents and punitive fees by homeowners associations that place some Georgia residents at risk of losing their homes are among the targets of several housing-related bills that Sen. Donzella James, D-Atlanta, and other members of the Georgia Legislative Black Caucus hope to revive in the next legislative session. Four such housing bills stalled in the Senate this year.
What’s Happening
The Senate Urban Affairs Committee met Wednesday to discuss the proposed legislation designed to protect renters from sharply escalating rent prices, and what some senators and presenters described as unfair fees, eviction and foreclosure processes imposed by property owners and private associations that manage homes, apartments and condominiums.
James, the committee chair, is the sponsor of SB 125, which would repeal state law enacted in the 1980s that prevents local governments from regulating rent. Georgia is among 30 states in the U.S. that prohibit rent control by municipalities or counties, and among several states now considering repealing such laws.
“We’re attempting to lift that ban so cities and counties … can work with residents to stop rental leases and bills that are doubling and tripling and causing foreclosures and evictions,” said James. She noted that as the cost of living increases, “we’re seeing more families struggling to pay rent in metro and rural areas, and consequently many of those people can’t afford it anymore and have become homeless, or are staying in day hotels when they can afford to do that.”
Two other housing-related bills were also on the agenda. SB 29 would limit the ways homeowners, condo and property associations can penalize people for nonpayment of fees, and requires them to seek arbitration before placing liens on a property. And Senate Resolution 37 would create a study committee to let lawmakers take a comprehensive look at the policies and practices of such property associations.
Why It Matters
Rents have increased sharply in Georgia in recent years. According to the U.S. Department of Housing and Urban Development, fair market rents — the monthly cost of rent for standard-quality units in a local housing market — increased by an average of 24% from 2019 to 2023 in the U.S. In Georgia, fair market rents increased by 33% over that time. A one-bedroom apartment in Georgia now averages $1,115, and a two-bedroom is $1,283.
Rental costs are considerably higher in some Georgia cities, especially those where out-of-state private equity firms have purchased large numbers of residential properties and jacked up rents. In Atlanta, the fair market rent for a one-bedroom is now $1,375 and a two-bedroom is $1,553.
Some apartments cost much more. Nothing in Georgia law limits how much a landlord can raise the rent.
The Urban Affairs committee heard from several tenants whose rents have increased precipitously. Among them was Gladys Dancy, 83, who lives at Galleria Manor Senior Apartments, an affordable housing complex in Smyrna. She said when she moved in 10 years ago, the rent for her two-bedroom apartment was $780, and has since climbed to $908. In July, she received a notice from the building’s owners that her rent will rise to $1,215 in October, a 39% increase.
“They’re pushing me out,” said Dancy, adding that her only income is from Social Security. Dancy has a leg impairment that requires her to use a walker.
Noting that she lives two blocks from Truist Park, the Atlanta Braves stadium, which was an undeveloped wooded area when she moved in, she said, “All the rents around here have gone way up, and now they say they’re switching from an affordable property to market price. Is that legal?”
Other people testified about negative experiences with homeowners associations.
One man said he was fined $4,000 by his HOA for cars parked on the street near his home, even though he doesn’t own a vehicle. His neighbor said the HOA doled out $1,600 fines for covenant violations such as lack of shutters on windows and has placed $10,000 liens on multiple tenants’ homes.
David Washington, a real estate broker, said he specializes in helping people faced with foreclosure to stay in their homes. He said he recently worked with a 91-year-old client whose property was foreclosed on for delinquent HOA dues and related late fees, even though the woman had never missed a mortgage payment.
“Georgia is a creditor-friendly state,” said Washington. The state’s legal code related to rent “is not designed for if life happens,” he said. Even if over a 30-year period a homeowner has a sterling payment history, an HOA does not take costly life events into account the way that some loan companies do, offering forbearance, he noted. “Whether it’s COVID, a car accident, a divorce, a death — if you owe $5,000 to an HOA, they will foreclose on you,” he said. “And the law allows it.”
James noted that small liens issued by HOAs or banks can quickly lead to foreclosure, if not paid or legally resolved within a few months.
“Once you get $2,000 worth of liens, that house can go up on the courthouse steps and be sold from under you,” she said.
Rep. Billy Mitchell, D-Stone Mountain, the House Democratic Caucus chair, told committee members that the “draconian” Georgia law that permits HOAs to foreclose on a property because of overdue HOA fees is “bad legislation and I think we should join the overwhelming majority of states which do not allow that.”
Preventing and reducing evictions is another legislative focus of the committee.
Mableton resident Alonzo Williams told the committee that he and his disabled mother were evicted from their apartment after the landlord doubled the rent during the pandemic. He said he works in education and his mother has a fixed income. “We struggled mightily to pay it, but we couldn’t,” he said, adding that they are now living in temporary housing, and so far unable to find a rental unit they can afford.
Elizabeth Appley, an attorney and fair housing advocate, said that as of April, 14% of Georgians were behind on rent, according to the National Equity Atlas, a data site run by PolicyLink, a research and advocacy firm. Those Georgians owing rent included 181,000 households, 72% of which were low-income families. More than half were households with children.
The average rent debt in Georgia is $1,400, said Appley, noting that that amount is considerably less than the cost of eviction to local communities in the state, which averages $11,200 per eviction, according to a University of Arizona law school analysis. That eviction tally takes into account the cost of emergency shelter, medical, welfare and juvenile delinquency costs.
Legislation to give local communities more control over rental costs, as well as to provide more tenant protections statewide is needed, Appley said.
Besides the rent control and property association-related bills, she encouraged the Senate committee to support HB 404, the Safe at Home Act, which would put a two-month cap on rental security deposits and require landlords to give tenants at least three days’ notice and the opportunity to pay overdue rent and fees before eviction proceedings can start. The bill unanimously passed the House but was not called for a vote in the Senate last session.
“While the idea of rent control may appear an attractive solution to the affordable housing crisis, it is critical to understand its counterproductive and damaging consequences,” said Stephen Davis, government affairs director for the Atlanta Apartment Association.
National research shows that rent control policies reduce housing supply, lower property values and disincentivizes new construction of apartments, he said.
Davis pointed to a 2021 St. Paul, Minnesota, rent control bill that capped annual rent increases to 3% and led, he said, to an 80% drop in building permits for multifamily housing. Overall, new housing starts in St. Paul decreased by 30% over the next year, resulting in an amendment of the law in 2022 that allows some landlords to make larger rent increases.
Adding additional housing units to a market is the best way to address housing costs in communities with climbing rents, Davis said.
“The key is to increase housing inventory,” he said. “But most local governments are installing additional regulations and burdens on development. They’ve raised millage rates and impact fees. … Every condition put on a new development has a cost,” which is often passed on to the renter, he said.
What’s Next
SB 125, the rent control bill, did not move in the State and Local Governmental Operations committee last session. Sen. Frank Ginn, R-Danielsville, who chairs the committee, told State Affairs he does not support state regulation of local rent policies.
“I think that should be between the owner of the property and the renter,” Ginn said. “I don’t think the government should interfere in that process. There are other things that we can do to help local governments to lower the cost of housing, and to address things that drive the cost of housing up.”
James said she and other legislators are inclined to consolidate and amend several housing-related bills still alive in both chambers. She told State Affairs that requiring mediation before evictions and foreclosures can occur and appointing a state ombudsman to give people involved in housing disputes “a place to take their complaints before they lose their homes” are two key elements that should be included in housing legislation to be pursued in 2024.
James said the Urban Affairs Committee plans to meet at least once more prior to the start of the next legislative session in January.
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Header photo: Smyrna resident Gladys Dancy, 83, told the Senate Urban Affairs Committee members that her landlord plans to raise her rent by 39% in October. (Credit: Jill Jordan Sieder)
New Georgia law mandates active shooter drills in public schools
THE GIST ATLANTA — Georgia K-12 public schools have been conducting informal active shooter drills for years, just like they have for fire, tornadoes and other emergencies. But earlier this year, state lawmakers made the safety precaution against active shooters and other intruders mandatory. Gov. Brian Kemp signed The Safe Schools Act into law in …
Gov. Kemp suspends fuel taxes
ATLANTA — Gov. Brian Kemp suspended the state’s tax on gas and diesel fuel today, declaring “a state of emergency due to the 40-year-high inflation and negative economic conditions felt by hardworking Georgians as a result of policies coming out of Washington, D.C.”
The governor’s executive order goes into effect Wednesday and will remain in effect until Oct. 12. Kemp can only suspend the tax one month at a time as part of the executive order.
Kemp said President Joe Biden’s economic policies made the executive order necessary.
“From runaway federal spending to policies that hamstring domestic energy production, all Bidenomics has done is take more money out of the pockets of the middle class,” Kemp said. “While high prices continue to hit family budgets, hardworking Georgians deserve real relief and that’s why I signed an executive order today to deliver it directly to them at the pump.”
Kemp cited analysis from Moody’s Analytics from August that said U.S. consumers are spending $709 more per month than two years ago and $202 more each month than last year to buy the same goods and services.
Georgians will save 31.2 cents on a gallon of gasoline and 35 cents on diesel fuel, he said, adding that Georgians saved roughly $1.7 billion at the pump when fuel taxes were suspended from March to December last year.
House Speaker Jon Burns, R-Newington, supported Kemp’s order and also framed it in a political context.
“I applaud Governor Kemp’s suspension of motor fuel taxes to keep our people and our economy moving despite Washington’s inaction on rising fuel prices,” said Burns. “Georgia’s success story is no accident — it is the result of conservative policies enacted to keep Georgia the nation’s best state for business.”
According to AAA, the average cost of a gallon of regular gas in Georgia on Tuesday was $3.57, up from $3.24 a year ago. Diesel fuel was $4.35 a gallon, down from $4.69 a year ago.
Overall, inflation has been ebbing in the U.S. over the past year. A report from the Federal Reserve in August noted that while the consumer price index (CPI) in July was up 3.3% from a year earlier, that level is far below the peak rate of 8.9% in the 12 months that ended in June 2022.
Energy prices in the South have decreased 12.8% from July 2022 to July 2023, largely due to a 20% drop in the cost of gasoline, while food prices rose 5.1%.
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Header photo: Gov. Kemp’s executive order to suspend fuel taxes will save Georgians 31 cents on a gallon of regular gasoline and 35 cents on diesel fuel through mid-October. (Credit: Jill Jordan Sieder).