Making Part D Access Affordable: Revising the Prescription Drug Benefit

By Xcenda |

UPDATE (February 2020): This analysis was released in July 2019 but has been updated to reflect current legislative proposals.

In July 2019, our original analysis modeled the Medicare Part D redesign legislative proposals using patient profiles. Given that there have been starts and stops and revisions along the way (and a refocus on the Senate versions given the President’s budget), we wanted to revisit our modeling to look at how patient out-of-pocket (OOP) spending would change in each of the redesign options. 

The Medicare prescription drug benefit (Part D) was enacted over 15 years ago and remains a model of private-public partnership with high beneficiary satisfaction. But despite its success, the program needs to evolve to meet the needs of beneficiaries moving forward. Since Medicare Part D was implemented in 2006, utilization of drugs has evolved. While there is high generic utilization, availability of specialty medication options has increased, creating affordability challenges for beneficiaries. 

According to the Kaiser Family Foundation, over 1 million beneficiaries had spending in the catastrophic phase of the benefit in 2017 and 5% coinsurance can still equate to hundreds (or thousands) of dollars a month, making the drug unaffordable for many beneficiaries. 

There has been momentum in Congress to look at the Part D benefit structure to determine the feasibility of a true OOP cap. Three main proposals have been put forward:

Xcenda was commissioned on behalf of the Council for Affordable Health Coverage to create patient profiles for typical patients with various conditions to determine the impact of the models on patient OOP spending. In addition, we looked at what the average non-low income subsidy beneficiary and diabetes patients would experience under these redesigns due to changes in the pre-catastrophic benefit design. The results from the full reports below clearly demonstrate that the OOP caps would create a meaningful step toward more affordable access for beneficiaries who face significant drug spending.