WASHINGTON — The Trump administration’s Part D Senior Saving Model, which aims to lower prices that Medicare beneficiaries with diabetes pay for insulin, has attracted 88 health insurers representing 1,750 plans, the administration announced.
“Just a couple of months ago, we announced this creative and new opportunity for manufacturers and health plans to develop a partnership and participate in this demonstration model to make the common forms of insulin — a notoriously expensive lifesaving drug — available to seniors at no more than $35 for a month’s supply,” Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said Tuesday on a phone call with reporters. “The model is predicted to save seniors an average of 66% on their insulin costs, or an average savings of $446 a year.”
The model, which was first announced in March, is available to Medicare beneficiaries with diabetes who are enrolled in either enhanced Part D plans or Medicare Advantage programs that cover prescription drugs. There are currently 959 stand-alone Part D plans — although it is unclear how many of those are enhanced plans — and 3,195 Medicare Advantage plans that also include Part D coverage, according to a report from data aggregator Mark Farrah Associates. About 45 million of Medicare’s 60 million beneficiaries are enrolled in plans that cover prescription drugs — of those, 56% are in Part D plans and 44% are in Medicare Advantage plans, according to the Kaiser Family Foundation. It is unclear how many of those in Part D are enrolled in enhanced plans.
In a Rose Garden briefing, President Trump called the demonstration program a “breakthrough,” noting that beneficiaries normally pay anywhere from $50 to $150 a month for insulin — “so this is a massive cut, 60%-to-70%; nobody’s seen anything like this for a long time.”
The model, to launch in January 2021, is aimed at the more than 3 million Medicare beneficiaries who require insulin for treatment of their diabetes, Verma said on the call. “CMS intends to monitor this model closely, and if it fulfills this enormous potential, we will expand it to other high-cost drugs,” she added.
“As the cost of a vial of common insulin has gone up 200% since 2010, many of our diabetic Medicare beneficiaries … struggle to pay these unpredictable and skyrocketing copays,” Verma explained. She cited a study published in January 2019 that found a substantial proportion of insulin users were skipping or cutting recommended doses because of cost.
Under the current Medicare Part D standard plan, beneficiaries must first pay a $435 deductible followed by a 25% copay — with the plan paying the remaining 75% — until the total cost of the medications, whether paid by the plan or the beneficiary, reaches $4,020. After that, beneficiaries enter a “coverage gap,” where they continue to pay the 25% while manufacturers have to contribute 70% of the cost and plans pay 5%. (When Part D began, beneficiaries had to pay 100% of the drug’s cost during that phase, which is why it was called the “coverage gap” or “donut hole.” However, that amount has been gradually reduced over the years, and is now 25%.)
Once the beneficiary’s out-of-pocket costs reach $6,350, the “catastrophic” phase of the plan kicks in, and the beneficiary pays 5% of costs after that point, with Medicare paying 80% and the plan paying 15%. The demonstration program is geared to plans offering enhanced Part D coverage, which costs a little more per month than a standard plan, but also covers more.
Normally insulin would fall under this plan, but with the demonstration program, beneficiaries would pay no more than $35 a month for insulin at every stage of the plan, Verma said.
The demonstration program — known as the Part D Senior Saving Model — “waives the Obamacare provision and allows plans to lower out-of-pocket costs for insulin while maintaining the manufacturers’ 70% discount. And this is what results in a reduced beneficiary copay to $35 per month through all phases” of the drug plan.
“It’s important to note that this is just the maximum,” Verma added. “We fully anticipate that many plans will go further in lowering or even eliminating copays for insulin. And plans will fund these lower copays either through slightly increased premiums or other discounts they negotiate from the manufacturers.” Some Enhanced Part D plans may raise their premiums when they implement the insulin program, but the increase “is expected to be minimal — likely about $1 to $2 per month.”
Manufacturers will play an important part in the demonstration, because when the drug plans reduce patients’ out-of-pocket costs, “it means the beneficiary remains in the coverage gap longer and manufacturers will provide more discounts and delay progression to the catastrophic phase,” said Verma. “This phase saves the federal government over $250 million over 5 years because of the decrease in catastrophic claims. The model clearly requires manufacturers to increase their coverage gap discount payments. And, fortunately, the world’s three major manufacturers of insulin — Eli Lilly, Sanofi, and Novo Nordisk — all understood the importance of the model and joined, agreeing to increase their discounts.”
Source: MedicalNewsToday.com
