Weekly Policy Update: Advocating for Medicare Part D
By: Colorado BioScience Association Date: 09/21/2018
The Colorado Bioscience Association along with We Work for Health Colorado, Epilepsy Foundation, Colorado Gerontological Society, Scleroderma Foundation, Rocky Mountain Stroke Center and the Colorado Business Roundtable sent a letter to the Colorado delegation regarding Medicare Part D. We voiced our concern about recent changes to Medicare Part D, contained in the Bipartisan Budget Act (BBA) of 2018, that risk destabilizing the carefully aligned incentives of the program.
The Medicare Part D program remains an essential success story, providing approximately 44 million seniors and individuals with disabilities with access to affordable prescription drug coverage. In Colorado alone, the Part D program covers 622,279 with the lowest monthly premium for a plan totaling $20.40. The success of Part D is owed to its market-based structure that fosters competition to keep costs low, while providing coverage for a wide range of medications and treatments.
Under the recent changes, beneficiaries will pay 25 percent of their costs in the donut hole, while insurance plans will only be responsible for 5 percent of beneficiary costs, down from 25 percent before the BBA. Brand manufacturers will see their share jump from 50 percent to 70 percent. Reducing buy-in from insurance plans, who serve as important stakeholders in the program, decreases incentives to keep plan costs low, which undermines Part D’s competitive marketplace structure and could negatively impact the costs seniors and individuals with disabilities pay at the pharmacy counter. We feel it is important to take the necessary steps to address these issues and preserve the long-term viability, health and successes of the essential Medicare Part D program.
For more information on Medicare Part D program visit the We Work for Health website and to view one of the letter sent click here.
Part D providing needed prescription drug coverage while helping to keep costs low and also improving beneficiaries’ health:
- Part D spending is far lower than the Congressional Budget Office’s initial projections. Total costs for Part D are $349 billion, or 45 percent less, than the initial 2004-2013 projections, and spending on Medicare Part D was just 14 percent of total Medicare spending in 2017.
- Average beneficiary Part D premiums are substantially lower than the projected amount. The average monthly beneficiary premium for Part D coverage is $33.50 in 2018, slightly less than the premium in 2017. Since 2011, premiums have remained relatively stable – between $30 and $34.
- Part D helps reduce spending on other Medicare services. Medicare Part D prescription drug coverage has led to an 8 percent decrease in hospital admissions for seniors. Gaining Part D coverage also improved adherence among enrollees with congestive heart failure, resulting in $2.3 billion in annual savings to Medicare as a result of reduced spending in Parts A and B.
- Part D helps beneficiaries live longer lives. A growing body of research finds reductions in mortality following the implementation of Medicare Part D. One study found since 2006, nearly 200,000 Medicare beneficiaries have lived at least one year longer with an average increase in longevity of 3.3 years.