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Key Medicare Drug Plan Benchmark Price Falls

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Health insurers may be skeptical of the Centers for Medicare and Medicaid Services’ Affordable Care Act public exchange plan supermarket system, but they still love its Medicare Part D prescription drug plan market.

Vigorous bidding helped cut the drug plan national average monthly bid amount for 2019 to $51.28, down 11% from the current average, CMS officials announced Tuesday.

(Related: Medicare Plan Signups Were Strong: Connecture)

Another pricing indicator, the monthly base beneficiary premium, is on track to fall 3.2%, to $33.19, officials said.

Both figures are standardized, weighted averages of the base prices included in plan bids for counties throughout the country.

CMS officials note that they made a number of coverage changes that might have helped hold down prices. One change will make it easier for plans to replace brand-name drugs with generic drug equivalents during the middle of the year.

The Medicare plan annual enrollment period for 2019 coverage will start Oct. 15 and end Dec. 7.

The national averages include the bid numbers for stand-alone prescription drug plans, and for the drug coverage in Medicare Advantage plans that offer prescription drug benefits.

The national averages leave out the numbers for many other types of plans, such as Medicare Advantage fee-for-service plans and Medicare Advantage plans aimed at people special needs.

CMS has posted a variety of documents related to the averages here.

The spreadsheets release give county-by-county numbers for the indicators used in the price benchmark calculations, such as the number of people eligible for Medicare Advantage plan coverage in each county.

One spreadsheet shows, for example, that there are three counties with more than 500,000 people eligible for Medicare Advantage plan coverage: Los Angeles County, with 1.3 million eligible residents; Cook County, Illinois, with 698,317 eligible residents; and Maricopa County, Arizona, with 601,852 eligible residents.

AHIP Reacts

America’s Health Insurance Plans (AHIP) said in a statement that,, whatever is happening with Medicare Part D premiums, U.S. prescription drug prices are still too high.

AHIP believes the drop in average Medicare drug coverage prices is due mainly to provisions in the Bipartisan Budget Act of 2018 (BBA 2018) that require drug manufacturers to give Medicare plan enrollees bigger discounts on branded drugs when the enrollees are in the Medicare Part D “donut hole,” AHIP says.

“Despite aggressive efforts by the pharmaceutical industry to reverse these changes, we urge Congress to continue to resist efforts to undo these new provisions and protect seniors’ affordable access to the care they need,” AHIP says.

The Medicare Part D Donut Hole

A Medicare Part D plan offers generous coverage for drugs before an enrollee reaches the annual limit on routine drug benefits, and after the enrollee reaches a catastrophic drug spending level.

Medicare managers describe enrollees who have drug spending between the routine benefits cap and below the catastrophic benefits minimum as being “in the donut hole.”

In 2019, an enrollee will be in the donut hole when the enrollee’s out-of-pocket drug spending is somewhere between $3,820 and $5,100.

BBA 2018 now requires manufacturers of some relatively new and expensive drugs to give a Medicare drug plan enrollee a 50% discount on the negotiated price for the drug when the enrollee is in the donut hole.

— Read 3 New Medicare Plan Shopper Secretson ThinkAdvisor.

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