Medicare’s retail prescription drug benefit plan, Medicare Part D, keeps out-of-pocket costs low for most beneficiaries. But a growing number of enrollees, particularly those battling cancer and other complex diseases, are finding that the coverage doesn’t prevent high out-of-pocket costs.
“Because of the way Part D is structured and because nearly all plans require beneficiaries to pay a percentage of the drug’s price every time they fill a prescription, these drugs can result in high up-front costs for initiating treatment and accumulated out-of-pocket costs of $5000 to $15,000 or more per year,” Stacie B. Dusetzina, PhD, a professor of health policy and cancer research at Vanderbilt University Medical Center, Nashville, Tennessee, writes in a perspective article published in The New England Journal of Medicine.
For example, in 2021, even after Part D beneficiaries reached their catastrophic-coverage phase — spending $2730 for brand-name drugs or $6550 for generic drugs — they still had to fork over 5% of the drug’s price until the end of the year. “This small coinsurance may sound inconsequential, but for high-priced drugs, it can result in additional monthly out-of-pocket spending of hundreds or thousands of dollars,” Dusetzina writes.
Anticipated reforms to Medicare Part D, proposed in the Build Back Better framework, promise substantial relief for patients with cancer. In her article, Dusetzina considers the potential savings for beneficiaries if any of four Medicare Part D redesign bills are passed.
The four proposed bills vary in approach but ultimately share two features: a cap on out-of-pocket spending, and ensuring more consistent and predictable out-of-pocket costs. Part D would go from multiple-phase coverage — deductible, initial coverage phase, coverage gap, and catastrophic phase — to a single-phase coinsurance, which would range from 15% to 25% before the spending cap.
Although the change in the bills would have little effect for those who have lower out-of-pocket costs, it could make a pronounced difference for patients with pricey drugs by enacting new out-of-pocket maximums, which would top off at $2000 to $3100 per year.
The savings may be significant. Out-of-pocket spending on some of the most used anticancer drugs under Part D could be reduced by 70% to 80% with the redesign, according Dusetzina. She found, for instance, that patients could save $8432 to $9532 annually on the cancer drug lenalidomide.
If enacted, the effects of the redesign for all beneficiaries will need to be monitored to ensure that it improves access to drugs, Dusetzina explains. For instance, brand-name drugs are currently purchased at a flat fee by beneficiaries during the coverage phase. The switch to coinsurance could increase costs for patients who spend less.
It’s also unclear whether the spending cap would be monthly or annually. This could make a big difference to those patients who have to pay the annual maximum in a single month.
But even with these unknowns, the “Part D redesign is long past due,” Dusetzina writes in her article. Each of the redesigns offers major relief to beneficiaries in need of high-cost medications.
“You get to have the FINANCIAL SECURITY of not having to spend all of your money on a drug if you happen to need one that is very expensive,” Dusetzina tweeted. “That’s kind of the point of health insurance. It is why EVERYONE should support a cap.”
Support for the research came from the Commonwealth Fund, Arnold Ventures, and the Leukemia and Lymphoma Society.
N Engl J Med. Published online November 10, 2021. Abstract
Content Source: https://www.medscape.com/viewarticle/962975?src=rss