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Part D Out-of-Pocket Costs to Spike in 2020
Part D catastrophic threshold to spike in 2020, hiking out-of-pocket costs: KFF report Kaiser Family Foundation (KFF) researchers examined how policy changes could impact the Part D market for the 2020 plan year and found that the catastrophic threshold is set to increase substantially, leading to higher out-of-pocket costs for certain beneficiaries.
Beneficiaries who take only brand-name drugs will pay for a quarter of that increase out of their pockets, while the rest will be covered by drugmaker discounts. Beneficiaries who take only generic drugs will pay the entire increase out of pocket, according to the report.
RELATED: Part D rebates grew but not enough to offset price spikes, OIG finds The report projects that out-of-pocket costs for beneficiaries who take only brand-name drugs will increase from $2,275 in 2019 to $2,652 in 2020, or close to $400. The researchers said that the large increase is due to the expiration of a provision within the Affordable Care Act that slowed the growth of the catastrophic threshold. “In the absence of a change in law, Medicare Part D enrollees can expect to face an increase in their out-of-pocket drug costs in 2020,” the researchers wrote. Based on 2017 claims data—the most recent available—the report says 4.9 million Part D beneficiaries who do not receive low-income subsidies reached the coverage gap, and 1 million reached the catastrophic coverage threshold. Had the threshold increased in 2017, fewer than 1 million people would have qualified for catastrophic coverage, meaning more people would be paying out of pocket in the coverage gap. The findings are notable in part, the researchers said, because some legislators are actively seeking ways to cap beneficiaries’ out-of-pocket costs. The drug pricing plan backed by House Speaker Nancy Pelosi would do so, alongside shifting some of the liability for costs for beneficiaries who do reach the catastrophic threshold. “Proposed changes to the Part D benefit design would help to mitigate out-of-pocket drug cost increases for Medicare beneficiaries, particularly for those with high drug costs who currently face no limit in their annual out-of-pocket expenses—with Part D plan sponsors and drug manufacturers potentially picking up much of the additional costs,” the researchers wrote.
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The catastrophic threshold for 2020 will rise from $5,100 in 2019 to $6,350, KFF found. That’s an increase of $1,250, or 25%.
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Tags: Medicare Part D
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Medicare Advantage, Part D members shifting to higher-rated plans
The number of Medicare Part D prescription drug plan members who will be in plans with four stars or more in 2020 rose to 27.6%, up from just 3.5% last year, according to data released by the CMS on Friday. The percentage of four-star or greater Medicare Advantage Part C plans with prescription drug coverage grew to a whopping 81.1% of members in 2020, up from 75.3% in 2019. The topic of lopsided star ratings toward the high end of the scale has been a sticking point with the Medicare Payment Advisory Commission, which believes $6 billion a year could be saved by revamping the way stars are awarded in the Medicare Advantage program. Medicare prescription drug plans 2020 star ratings The percentage of Medicare Part D prescription drug plan members in plans with four stars or more in 2020 rose sharply from the year before.
The average star rating of Part D plans, which are managed by pharmacy benefit management companies and health insurers, has bobbed up and down for years but has always hovered below four stars. The average star rating across the 54 Part D contracts in 2020 was 3.5, up from last year's average rating of 3.34. Enrollment in Part D prescription drug plans with fewer than three stars dropped to 0.8%, compared to 6.2% last year. Just 5.6% of Part D plans received below three stars, whereas 9.6% did in 2018. Meanwhile, more than 200 Medicare Advantage plans offering prescription drug coverage, representing 52.4% of these plans for 2020, received at least four stars. Last year, 172, or 45.7% of plans, were part of that category. The average star rating for Medicare Advantage plans with prescription drug coverage was 4.16 for 2020, up from last year's 4.06. Medicare Advantage plans with fewer than three stars dropped to 15%, compared with 21.3% in 2019. Higher rated plans get larger share of enrollees More people were enrolled in Medicare Advantage plans with prescription drug coverage that had 4.5- or 5-star ratings.
The CMS star rating system for Medicare's private insurance coverage is meant to hold insurers accountable for the care provided to their members. Health plans have a financial incentive to provide better quality care for their members, because those that garner four or more stars receive a 5% boost to their monthly per-member payments from Medicare. Twenty-three individual plans scored five stars for 2020. Twenty of those were Medicare Advantage plans offering prescription drug coverage, including nine new contracts that had not earned the high performing indicator last year. Two of the plans were stand-alone prescription drug plans and one was a Medicare Advantage-only plan. CVS Health, Humana, UnitedHealth Group and Kaiser Foundation Health Plan were among companies offering five-star plans. Five individual plans covering more than 73,000 people received a warning from the CMS for consistently low quality ratings. Those plans—owned by QHP Financial Group, Delaware Life Insurance Co., Centers Plan for Healthy Living, Universal Health Services and Magellan Health—have earned ratings of 2.5 stars or fewer for a Medicare Advantage or Part D contract since at least 2018. CMS Administrator Seema Verma said in a statement that the star ratings in the Medicare Advantage and Part D programs indicate that "seniors will have access to more high-quality plans," and pointed to projections the agency released last month suggesting that in 2020 Medicare Advantage average monthly premiums will hit their lowest point in 13 years.
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Scheduled Maintenance For HealthCare.gov
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Tags: Medicare Advantage, Medicare, Medicare Supplement, Medicare Part D
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Medicare Pays for 1/3 of U.S. Prescription The majority of Medicare voluminous prescription drug spending is for drugs covered under Part D, although Part B also covers medicine; this spending accounts for 30 percent of national retail spending on drugs, and nearly $1 out of every $5 in total Medicare spending. Prescription drugs are an important component of health care for Medicare beneficiaries, which includes more than 60 million older adults and people with long-term disabilities. The majority of Medicare prescription drug spending is for drugs covered under Part D, the outpatient prescription drug benefit. Medicare Part B also covers drugs that are administered to patients in physician offices and other outpatient settings. A majority of Americans favors allowing the federal government to negotiate prescription drug prices on behalf of Part D beneficiaries; the practice is prohibited under current law. View Full Article |
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Annual Enrollment Period (AEP) Checklist |
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Tags: Medicare Advantage, Medicare, Medicare Supplement, Medicare Part D
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It's Time to Help and Guide Beneficiaries
Research by the Kaiser Family Foundation found just 11% of Medicare Advantage beneficiaries voluntarily switch plans annually; another study found only 13% of Part D beneficiaries switch voluntarily, yet nearly h For 2019, most Medicare Advantage beneficiaries (88%) are in plans including drug coverage, and more than half (56%) pay no drug premium beyond the Part B premium. And don’t forget those who prefer Medicare Supplement plans: they vary by design greatly by region – but often it’s possible to cap out-of-pocket costs at a lower level than what’s available in Medicare Advantage plans. What‘s best for each client? That’s your job, your challenge, your knowledge and expertise in action. And, as always, we are here to assist our agents with any challenges they may have during this time. AEP Resources: ☛ Welcome to your 2020 AEP Headquarters☛ Sell Med Advantage and PDP Plans online ☛ Solution to Medicare.gov Drug Finder changes ☛ Get your Med Advantage apps issued faster ☛ Co-op marketing dollars available for AEP ☛ 2020 AHIP link with $50 discount ☛ 14 Ways to Generate Medicare Leads Helpful Guides: Our goal is to provide agents in the senior insurance market with the information they need to inform their most important business decisions. We picked a handful of our most helpful articles and placed them all on one page for your convenience. ☛ Check out our PSM Agent Guides pageContact Us: Phone: (800) 998-7715
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alf (46%) of those who did cut their premiums at least 5%.
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Tags: Medicare Advantage, Medicare, Medicare Supplement, Medicare Part D
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Medicare Changes for 2020
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Annual Enrollment Period (AEP) Checklist |
Medicare and You for 2020 just came out and while we’re still waiting for the updates on any cost changes, here’s are a couple of notable changes coming for 2020.
That’s right, pictures of donuts on Medicare related posts will be a thing of the past in 2020. The Medicare Part D Donut Hole is closing. The percentage beneficiaries will pay in the coverage gap will decrease as the Donut Hole closes.
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Tags: Medicare Advantage, Medicare, Medicare Supplement, Medicare Part D
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Med Supp Market Survey Results Gen Re released results of this year’s Medicare Supplement Market Survey, and found:
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Annual Enrollment Period (AEP) Checklist |
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Tags: Medicare Advantage, Medicare, Medicare Supplement, Medicare Part D
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Annual Enrollment Period (AEP) Checklist |
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Tags: Medicare Advantage, Medicare, Medicare Supplement, Medicare Part D, AgentXcelerator