The Medicare Part D program supplies an outpatient prescription drug get advantages to older adults and other folks with long-term disabilities in Medicare who join in personal plans, together with stand-alone prescription drug plans (PDPs) to complement conventional Medicare and Medicare Advantage prescription drug plans (MA-PDs) that come with drug protection and different Medicare-covered advantages. This temporary analyzes Medicare Section D enrollment and prices in 2023 and developments over the years, in response to information from the Facilities for Medicare & Medicaid Services and products (CMS).
This research highlights the really extensive enlargement of Medicare Benefit drug plans on the market for Section D drug protection, the place enrollment general is focused in a handful of enormous plan sponsors. Reasonable premiums and deductibles for drug protection are a lot decrease in MA-PDs than in stand-alone PDPs. Price-sharing necessities for lined medicine in MA-PDs and PDPs are other, making comparisons of out-of-pocket drug prices tough. Whilst decrease premiums could make MA-PDs horny to enrollees, protection in a Medicare Benefit plan additionally comes with limits on supplier networks and utilization management restrictions that don’t observe in conventional Medicare.
Greater than part of all Medicare Section D enrollees are in Medicare Benefit drug plans
A complete of fifty.5 million other folks with Medicare are lately enrolled in plans that give you the Medicare Section D drug get advantages, together with plans open to everybody with Medicare (stand-alone PDPs and MA-PDs), and plans for particular populations (retirees of a former employer or union and Medicare Benefit Particular Wishes Plans, or SNPs).
In 2023, greater than part of all Medicare Section D enrollees (56%, or 28.3 million) are enrolled in MA-PDs and 44% (22.2 million) are enrolled in stand-alone PDPs, proceeding a pattern of declining enrollment in PDPs and lengthening enrollment in MA-PDs, reflecting enrollment enlargement in Medicare Benefit plans general (Determine 1, Table 1). Between 2019 and 2023, the collection of MA-PD enrollees greater by means of 47% (9 million extra MA-PD enrollees), whilst enrollment in PDPs diminished by means of 12% (3 million fewer PDP enrollees). In 2023, there are 6.1 million extra Medicare beneficiaries with drug protection underneath MA-PDs than PDPs.
Section D enrollment is focused in 3 nationwide corporations – UnitedHealth, CVS, and Humana – with a blended 57% of all Section D enrollees
The highest 3 corporations – UnitedHealth, CVS Well being, and Humana – duvet as regards to 6 in 10 of all Medicare beneficiaries enrolled in Section D in 2023 (57%), the similar percentage as in 2022 (Determine 2).
With the exception of Kaiser Permanente, which doesn’t be offering stand-alone PDPs, the highest Section D plan sponsors be offering each PDPs and MA-PDs. For many corporations, Section D enrollment is extra concentrated in a single marketplace than the opposite; as an example, CVS Well being, Centene, and Cigna have larger enrollment in PDPs than MA-PDs, whilst UnitedHealth and Humana have extra MA-PD enrollees than PDP enrollees (Determine 3).
Six in 10 beneficiaries receiving the Section D Low-Source of revenue Subsidy are enrolled in Medicare Benefit drug plans
In 2023, 13.4 million Section D enrollees (27% of all Section D enrollees) obtain top rate and cost-sharing help during the Section D Low-Source of revenue Subsidy (LIS) program. Those further monetary subsidies, also referred to as “Additional Lend a hand,” pay Section D premiums for eligible beneficiaries (so long as they join in stand-alone PDPs designated as premium-free “benchmark” plans) and scale back charge sharing. The Inflation Relief Act expands eligibility for full Part D LIS benefits starting in 2024.
In line with general Section D enrollment developments, LIS enrollment in PDPs has declined over the years whilst expanding in MA-PDs; MA-PDs now join 62% of all LIS enrollees (8.3 million) (Determine 4, Desk 1). As LIS enrollment in MA-PDs has greater, enrollment in Particular Wishes Plans (SNPs), a kind of Medicare Benefit plan, has additionally greater. Just about 4 in 10 LIS enrollees (39%, or 5.2 million) are enrolled in SNPs in 2023, up from 4% in 2006. SNPs prohibit enrollment to beneficiaries with sure traits, together with those that are dually enrolled in Medicare and Medicaid (D-SNPs), which account for many SNP enrollees; the ones with sure continual prerequisites (C-SNPs); and those that require an institutional degree of care (I-SNPs).
The common per month top rate for Section D drug protection is 4 instances extra in PDPs than in MA-PDs
The enrollment-weighted reasonable per month top rate for PDPs is $40 in 2023 and has remained inside a couple of greenbacks of this quantity for a number of years (Determine 5, Table 2). The common per month PDP top rate is considerably upper than the enrollment-weighted reasonable per month portion of the top rate for drug protection in MA-PDs ($10 in 2023). (The full reasonable top rate for MA-PDs, together with all Medicare-covered advantages, is $15 per month in 2023.) MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums, so the common top rate for drug protection in MA-PDs is closely weighted by means of zero-premium plans. Rebates to Medicare Benefit plans are at traditionally prime ranges, having more than doubled between 2018 and 2023. In 2023, 73% of MA-PD enrollees are in plans that don’t fee a per month top rate (up from 54% in 2018), whilst all stand-alone PDPs fee a per month top rate. The common enrollment-weighted top rate for Section D protection for the 27% of MA-PD enrollees in plans that fee a per month top rate is $38 in 2023, very similar to the common per month top rate for PDPs.
The weighted reasonable annual Section D deductible is 7 instances greater in PDPs than in MA-PDs
In 2023, a big majority of PDP enrollees (86%) are in plans that fee a deductible, with three-fourths of PDP enrollees in plans that fee the usual quantity of $505 in 2023. Conversely, simply over 1 in 5 MA-PD enrollees (22%) are in plans that fee the usual Section D deductible, whilst 60% are in plans that fee no drug deductible. Those enrollment patterns give an explanation for the large divergence between PDPs and MA-PDs within the enrollment-weighted reasonable Section D deductible quantity. For PDPs, the common Section D deductible in 2023 is $411, seven instances greater than the common drug deductible in MA-PDs ($58) (Determine 6). Simply as MA-PDs can use rebate greenbacks to decrease the Section D portion of the plan top rate, they are able to additionally use rebate greenbacks to scale back Section D cost-sharing quantities, together with deductibles.
Section D enrollees in most cases face no or low per month copays for generic medicine however considerably upper copays or coinsurance for different medicine
The everyday five-tier formulary design in Section D comprises tiers for liked generics, generics, liked manufacturers, non-preferred medicine (which is able to come with each manufacturers and generics), and distinctiveness medicine. Each stand-alone PDP and MA-PD enrollees face a lot upper cost-sharing quantities for manufacturers and non-preferred medicine than for medicine on a generic tier (Determine 7). PDP enrollees are much more likely to stand a mixture of copayments and coinsurance for various formulary tiers, whilst MA-PD enrollees in most cases face copayments for all tiers apart from the distinctiveness tier. (This research does no longer examine which particular medicine are lined on every tier in PDPs and MA-PDs, which, along with the cost-sharing quantities that plans fee, would additionally affect enrollees’ out-of-pocket prices.)
- A bigger percentage of MA-PD enrollees than PDP enrollees pay $0 for generics, whether or not on a liked tier or on the usual generic tier.
- For liked manufacturers, 65% of MA-PD enrollees and 21% of PDP enrollees face copayments for liked manufacturers of $45 to $47 (the utmost copayment quantity approved by means of CMS), whilst 40% of PDP enrollees are in plans that fee coinsurance of 25% or much less, in comparison to not up to 1% of MA-PD enrollees.
- For non-preferred medicine, maximum MA-PD enrollees (91%) are in plans that fee copayments whilst just about all PDP enrollees are in plans that fee coinsurance. Over part (53%) of all MA-PD enrollees are in plans that fee $100 for non-preferred medicine, the utmost copayment quantity allowed by means of CMS. Part of PDP enrollees are in plans than fee 40% to not up to 50% for non-preferred medicine and 24% are in plans that fee a 50% coinsurance fee, the utmost coinsurance allowed.
- A bigger percentage of MA-PD enrollees than PDP enrollees are in plans that fee the utmost 33% coinsurance fee for distinctiveness tier medicine. For distinctiveness tier medicine, outlined by means of CMS as those who charge at least $830 per month in 2023, a miles greater percentage of enrollees in MA-PDs (76%) than PDPs (14%) are in a plan that fees the utmost 33% coinsurance, whilst a miles greater percentage of enrollees in PDPs (76%) than MA-PDs (3%) are in a plan that fees the minimal 25% coinsurance. Plans that waive some or the entire same old deductible – which is the case for many MA-PDs – are approved to set the distinctiveness tier coinsurance fee above 25%.
Given the other cost-sharing constructions followed by means of MA-PDs and PDPs, specifically for non-preferred medicine, it may be tough to match the real out-of-pocket prices that beneficiaries would face for several types of medicine throughout plan varieties. It can be tough to understand how a coinsurance fee will translate into exact out-of-pocket prices with out realizing the underlying record worth of a drug.
Juliette Cubanski is with KFF. Anthony Damico is an impartial guide.