Medicare Affordability

Medicare Affordability

Medicare Part D is a uniquely popular and successful program that provides over 42 million seniors and individuals with disabilities access to a range of affordable prescription drug plans. Its unique structure keeps costs down by providing a market of options and offering patients the freedom to choose among dozens of private health plans competing for patient enrollment based on premiums, coverage, quality and service.

For over 10 years, Part D has been a success, but as out-­‐of-­‐pocket costs have increased in recent years, more could be done to improve affordability and predictability for seniors in the program. But there are right ways and wrong ways to do that. Recent changes made in Washington were the wrong way as they jeopardize Part D’s successful structure and inhibit future access for many beneficiaries who rely on it for affordable treatment. President Trump and his administration have proposed a new plan with some proposals that could address affordability issues.

Trump Administration Request for Information (RFI) and Blueprint for Change

The Trump Administration plan to address prescription drug prices encapsulates a multi-­‐part plan, as outlined in the President’s FY2019 budget proposal and a Request for Information (RFI), soliciting answers to more than 130 questions for the Department of Health and Human Services (HHS). While the RFI covers a range of issues, a primary focus is on changes to the Medicare Part D program, and ways to help patients lower their out-­‐of-­‐pocket costs.

Proposed Pass Through Savings

Included in the Trump Administration proposal are provisions to help patients save more out-­of-­‐pocket by passing on some of the savings from negotiated rebates to beneficiaries at the point of purchase. Currently, Part D plans require beneficiaries to pay cost-­‐sharing based on the full price of their medicine, even in cases where the plan has negotiated a drastic price reduction through rebates. If more of the savings from negotiated rebates were passed through to the beneficiary at the point of sale, countless Part D seniors could save more out-­of-­‐pocket at the pharmacy counter, enabling them to access their medicines consistently and therefore manage their conditions more effectively.

Recommended Out-­‐of-­‐Pocket Caps

Once Part D patients reach enough annual out-­‐of-­‐pocket spending to enter the catastrophic coverage phase, the patient pays a small coinsurance amount or copayment for covered drugs for the rest of the year. The Administration proposes creating an annual out-­‐of-­‐pocket spending limit, which would effectively end cost-­‐sharing for beneficiaries in the catastrophic phase. Like out-­‐of-­‐pocket caps in other health insurance markets, this shift will substantiallyreduce the financial burden for serious illness and provide needed financial reprieve for the most vulnerable patients in the Part D program.

More Work Needs to Be Done

Medicare Part D is a successful program with a proven track record for participating patients and plans. In fact, surveys show that 90 percent of beneficiaries are satisfied with their Part D coverage. While point-­‐of-­‐sale rebates and an out-­‐of-­‐pocket cap will help patients afford and access treatment, more work must be done to improve affordability and predictability for seniors and ensure the integrity of Part D is not jeopardized. Implementing any reforms that will increase the financial burden on beneficiaries and diminish affordable access will compromise the effectiveness of one of the most successful government programs to date, and sever a vital lifeline for millions of seniors and people living with disabilities across the U.S.