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From Health Law Daily, October 13, 2015

Part D plan options decrease while premiums increase

By Kayla R. Bryant, J.D.

Medicare beneficiaries seeking enrollment in stand-alone prescription drug plans (PDPs) for 2016 will have, on average, four fewer choices to select from compared with last year, and the average premium is expected to increase by 13 percent from 2015. The Kaiser Family Foundation (KFF) revealed its initial look at Part D plan offerings for the next Medicare open enrollment period, scheduled for October 15 to December 7, 2015, focusing on the PDP marketplace and changes from last year’s offerings.

Plan availability. At the PDP market’s peak in 2007, the average beneficiary had 55 plans to choose among. This dropped to 30 in 2015 and will be down to 26 for the 2016 plan year. On average, 16 Medicare Advantage prescription drug (MA-PD) plans will be available as well. A total number of 886 PDPs will be offered nationwide, down from last year’s 1,001 total, and the lowest in program history. According to KFF, sponsors responded to CMS’ encouragement to eliminate plans with low-enrollment or that are redundant, resulting in the lower numbers.

Premiums. The trend of flat premiums from recent years is over, as the national average for PDP premiums is expected to increase. KFF expects this to happen even if a large number of beneficiaries switch to lower-premium plans. The average monthly PDP premium is expected to be $41.46, up from last year’s average of $36.68 and a marked increase from 2006’s average of $25.93. Premiums for plans with basic coverage with the highest enrollment are expected to range from $22.56 to $36.39, while the most popular enhanced plan premiums are projected to range from $18.40 to $66.25. According to the report, premium variation is observed among plans that offer equivalent benefits to the basic benefits.

Plan design. The maximum Part D deductible will increase by $40 in 2016. In 2016, 67 percent of PDPs will charge a deductible, compared to 58 percent in 2015. However, KFF notes that the PDPs adding a deductible in 2016 have a low number of enrollees, so the share of new enrollees facing a deductible will likely be small. As was the case last year, all PDPs will use tiered cost sharing. There is also a trend toward using coinsurance in place of copayments, resulting in higher out-of-pocket payments for more expensive drugs. Coinsurance cannot exceed 33 percent. The coverage gap, also known as the doughnut hole, is continually decreasing. In 2016, name-brand drugs purchased in the gap will have manufacturer prices slashed by 50 percent.

Companies: Kaiser Family Foundation

MainStory: TopStory ReimbursementNews CMSNews CopayNews DrugBiologicNews GenericDrugNews PartDNews PrescriptionDrugNews

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