A new analysis by the Kaiser Family Foundation has found that the number of non-Low-Income Subsidy (LIS) beneficiaries reaching the catastrophic phase of the Part D benefit has increased since 2010. In 2019, almost 1.5 million beneficiaries had out-of-pocket expenses exceeding the catastrophic threshold of $5,100 – and the arrow is going in the wrong direction.
Our national reality is that millions of American seniors cannot afford their medication due to high cost-sharing requirements and millions more will not be able to afford their medicines in the future unless Congress directly addresses this crisis. It’s time to “cap-and-smooth” Part D. Specifically:
* Congress should create an out-of-pocket maximum (an annual cap) on Medicare beneficiary Part D out-of-pocket expenses. Medicare is the only major insurer in the U.S. that lacks an OOP maximum. While all proposals under current consideration include an annual OOP cap, patients would derive greater benefit from a consistent, monthly cap on Part D OOP expenses.
* Any proposal that adopts an annual – rather than a monthly – OOP cap in Medicare Part D should be paired with a "smoothing mechanism." Smoothing would allow beneficiaries the option to evenly spread costs over a plan year, thereby avoiding large lump sum OOP expenses. Many beneficiaries cannot afford to make lump sum out-of-pocket payments at the pharmacy counter, leading to abandoned prescriptions and lower treatment adherence. This flexibility should be available to all beneficiaries, at any time during the benefit year, regardless of a beneficiary's level of OOP spending.
* Congress should ensure the program includes strong patient protections, such as hardship exceptions or other mechanisms to allow beneficiaries a payment grace period. There are legitimate reasons a beneficiary might miss a payment (e.g., illness or hospitalization, relocation) that should not disqualify them from utilizing the flexibility. Further, plans should be required to notify patients when they are behind on their payments and inform them of the ability to apply for a hardship exception.
* Congress should ensure that smoothing is the default position rather than requiring Medicare beneficiaries to opt-in or otherwise enroll. This approach will ease implementation and lower administrative barriers to participation.
* Congress should look to CMS’s Part D Senior Savings Model that allows patients with diabetes enrolled in participating Medicare Part D plans to access insulin for $35 per monthly prescription, to determine if expanding a low-cost maximum copay model would broadly improve outcomes for patients with other conditions.
But beware. While all proposals to address prescription drug spending should be evaluated, Congress should reject consideration of comparative cost-effectiveness methodologies. Measurement tools such as the Quality-Adjusted Life Year (QALY) assign a value between 0 (death) and 1 (perfect health) to the people for whom a given treatment is intended. The result is that patients (otherwise known as "people") who are sicker, older or have a disability are assigned lower “life values.” QALYs also fail to account for health disparities, incorporating and institutionalizing a bias that adversely impacts communities of color. When applied to healthcare decision-making by payers, this means that treatments for these more vulnerable beneficiaries are deemed "too expensive" and therefore "not cost-effective" to cover. Healthcare must never be red-lined.
The “ask” of the 132 signatories is simple: “Congress must take action to address the unsustainable OOP burden faced by Medicare Part D beneficiaries. We call on your committees to include Part D reforms that ensure patients can access the medications needed to improve and maintain their health in the budget reconciliation package.”
Let’s get this Part D started!