The Administrations stated rationale for this proposal is to correct the misaligned incentive whereby plans might encourage enrollees to use more expensive brands so that enrollees move more quickly through the coverage gap and into catastrophic coverage, where plans share of racv member discounts theme parks costs is relatively low.
Against this backdrop, and with rising concern over increases in prescription drug costs, the Trump Administration has proposed what it calls a 5-part plan that would change several features of the Part D drug benefit.
Looser coverage standards and greater use of utilization management could lower premiums if plans negotiate higher rebates and if utilization declines, both of which would lower plan costs.
Medicare Part D is a voluntary outpatient prescription drug benefit for people with Medicare, provided through private plans approved by the federal government.The Congressional Budget Office (CBO) estimates that spending on Part D benefits will total 99 billion in 2019, representing 15 of net Medicare outlays.The increase may be due in part to the market entry in late 2013 of relatively expensive breakthrough medications to treat hepatitis.Budget effects CBO estimated that adding an out-of-pocket limit, increasing the share of costs that plans pay for catastrophic coverage, and reducing Medicares reinsurance would reduce federal spending.5 billion over 10 years.The ACA stipulated that the value of this discount would count towards a beneficiarys annual out-of-pocket spending.Whats on the Horizon for Beneficiaries who Reach the Coverage Gap?Fewer enrollees would have out-of-pocket spending high enough to qualify for this additional financial protection, however, if the Administrations proposal to exclude the value of the manufacturer discount from the TrOOP calculation was also adopted, as described above.The average annual growth rate in per beneficiary costs for Part D is projected to be higher in the coming decade (4.6) than between 20 (2.2) (Figure 5).Previously, PDP sponsors were required to demonstrate that their enhanced PDPs were meaningfully different in terms of enrollee out-of-pocket costs in order to ensure that plan offerings were more distinct.
But actual premiums paid by Part D enrollees vary considerably from this amount.Figure 1: The number of Medicare Part D enrollees without low-income subsidies who reached the coverage gap increased from.8 million.2 million between 20The Affordable Care Act (ACA) included a provision to phase out the coverage gap by gradually reducing the share.Under reinsurance, Medicare subsidizes 80 of total drug spending incurred by Part D enrollees above the catastrophic coverage threshold (Figure 3).Understanding how well Part D is meeting the needs of people on Medicare will be informed by ongoing monitoring of the Part D plan marketplace, assessing coverage and costs for high-cost biologics and other specialty drugs, and evaluating the impact of the drug benefit.The number of non-LIS enrollees reaching the gap was relatively stable between 20, averaging.8 million over these years, even as the overall number of Part D enrollees increased.Between 20, the number of non-LIS Part D enrollees who qualified for catastrophic coverage doubled from.5 million.0 million, while their average out-of-pocket costs increased by a relatively modest 6 percent, from 3,004 to 3,196.Conclusion The Administrations 5-part plan for Part D would likely affect all Part D enrollees in terms of their out-of-pocket costs, premiums, and access to medications, although some enrollees would be affected to a greater degree than others.Non-LIS Part D enrollees move through the coverage gap more quickly because they have to spend less out of their own pockets before qualifying for catastrophic coverage.Similarly, modifying the scheduled increase in the out-of-pocket spending threshold to protect Part D enrollees from a steep increase in out-of-pocket costs would also result in higher Medicare spending.In 2018, 43 million Medicare beneficiaries are enrolled in Medicare Part D plans, including employer-only group plans.