Lawmakers Should Cap Patient Cost Sharing in Medicare Part D
The U.S. House of Representative health committee leaders have unveiled a discussion draft of a new bill designed to cap a Medicare patient’s out-of-pocket spending in the "Part D" prescription drug benefit.
America's sickest seniors should be delighted by the news. Capping patient out-of-pocket spending will ensure they can access the drugs they need to live healthy lives. Congress should see this effort across the finish line – and the sooner the better.
Medicare Part D has been the poster child of popular, successful and budget-friendly government entitlements since its launch in 2006. Today, roughly 43 million seniors rely on Medicare Part D to access necessary medications.
Beneficiaries are largely pleased with their coverage; fully 8 in 10 seniors say their drug plan is "a good value." In short, when it comes to prescription drug coverage, Part D gets an A.
Part D's unique structure is one reason for this success. The government subsidizes coverage, but private insurers administer each plan. This forces insurers to compete with one another to create high-value, low-cost options to earn customers' business.
And it's this competition that keeps prices at bay – for beneficiaries and the government. The average patient premium in 2019 is just $33.19. And Part D's program costs were 45 percent lower than predicted after a decade. That's largely unheard of when it comes to government entitlements.
But for some, the program isn't all sunshine and rainbows. The sickest beneficiaries – many of whom take multiple drugs – spend a small fortune on their medicines. That's because most plans require them to pay a certain co-insurance or co-pay fee for each prescription they pick up.
Consider that in 2016, the latest year for which data is available, more than 800,000 Part D enrollees spent $5,000 or more at the pharmacy counter.
That's a lot of money – especially when you consider that more than half of Americans don't have enough money in the bank to cover an unexpected $1,000 emergency expense.
High out-of-pocket costs aren't simply a financial concern; they're also a threat to patient health. Studies show that high out-of-pocket costs are associated with increases in medication non-adherence.
And when seniors don't take their prescriptions as directed, their conditions worsen, and they often require more expensive medical care down the line. In fact, medication non-adherence is responsible for at least 10 percent of hospitalizations across the country. It also costs our health care system up to $289 billion every year.
Lawmakers want to improve Part D for these patients. In their draft bill, they've proposed eliminating beneficiary out-of-pocket costs for seniors who hit Part D's so-called "catastrophic phase" -- which means they have spent at least $5,100 on prescription drugs for the year.
Capping patient out-of-pocket spending would provide some serious relief to these beneficiaries. Seniors will know they have a financial safety net should they fall ill and require one or more expensive medications. And they'll know they can afford to continue taking these medicines as directed, which improves overall health outcomes.
This new legislation is still in its infancy stages, so lawmakers will have to work out the nitty-gritty details of the reform in the coming weeks. But the draft discussion legislation shows a lot of promise – and its one that patients and lawmakers alike should support.
Peter J. Pitts, a former FDA Associate Commissioner, is president of the Center for Medicine in the Public Interest.