Fallout From Part D Legislation Remains
The fallout from the major reductions in out-of-pocket (OOP) costs and transfer of liability to Part D plans in the Inflation Reduction Act (IRA) continues. The Centers for Medicare and Medicaid Services (CMS) saw massive increases in standalone Part D plans when bids for 2025 were submitted by insurers and the agency quickly created what I think is an extra-legal special subsidy program to limit premium increases in the program. The changes also impact Medicare Advantage (MA) and will contribute to cuts and premium increases there as well for 2025. The GOP in Congress has asked the congressional Government Accountability Office (GAO) to investigate and now is asking the Congressional Budget Office (CBO) what costs will be.
I will have a special blog on this next week. My previous blogs on this are here: https://www.healthcarelabyrinth.com/will-democrats-be-victim-of-an-october-surprise-of-their-own-making/ and https://www.healthcarelabyrinth.com/part-d-premium-woes-due-to-the-inflation-reduction-act/ .
I have argued that while the program set up by CMS will mitigate some but not all of the hefty premium increases in 2025, the Part D changes in IRA could literally make the standalone PDP program unsustainable over time. The program is only for three years and the massive cost-shift is permanent. It is an example of the perils of hasty political legislation. Democrats passed the changes and quickly took credit for lowering and capping Medicare enrollees’ drug costs. But they did not think about the huge impacts of moving costs to insurers – the changes were not adequately funded by the government. What’s more, the sheer richness of the changes will create major inflation for insurers over time, too.
Another fallout we are already seeing beyond premium hikes: a major Part D sponsor, Centene, is dropping all commissions in its Part D products. Some of this could be a push by the insurer to move people to Medicare Advantage (MA), but most of it is the fact that the already narrow-margin standalone Part D program has become even less profitable with the changes. Centene may have had no choice but to stop commissions. Others likely will follow suit in the future.
Of course, a major broker and agent group is upset and I cannot blame them, but it does not change the financial realities. They are right that beneficiaries will be hurt by a lack of support in the program.
Ironically, the drumbeat about the wonderful benefits of the changes continues. The nation’s biggest senior advocate, AARP, commissioned a study that found that more than a million U.S. seniors will save $1,100 in prescription drug costs every year under a provision due to the $2,000 OOP cap. But there is absolutely no mention of the negatives that the poorly-thought-out legislation will have — premium hikes and less plan choice for tens of millions. AARP either does not understand what is going on or is acting politically here. Either way, shame on the organization.
Additional articles: https://www.fiercehealthcare.com/payers/payer-roundup-devoted-health-raises-112m-la-care-eliminates-prior-auth-codes and https://insurancenewsnet.com/innarticle/agents-fight-for-part-d-commissions and https://www.modernhealthcare.com/insurance/centene-broker-commissions-medicare-part-d-plans-2025 and https://thehill.com/policy/healthcare/4852482-prescription-drug-cost-savings/ and https://www.aarp.org/content/dam/aarp/ppi/topics/health/prescription-drugs/new-medicare-part-d-out-of-pocket-spending-cap-important-improvement-for-enrollees-facing-high-prescription-drug-costs.doi.10.26419-2fppi.00335.001.pdf
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#partd #pdp #medicareadvantage #ira #cms #marketing #agents #brokers
https://insidehealthpolicy.com/daily-news/republicans-ask-cbo-budgetary-impact-part-d-premium-demo
Rep. Comer Shows How Serious Congress Is On PBM Reform
Look no further than a letter from House Oversight and Accountability Committee James Comer, R-KY, for what may be in store for the Big 3 pharmacy benefits managers (PBMs) – CVS Caremark, Express Scripts, and OptumRx – in coming years.
Comer sent a letter after three prominent PBM executives appeared before Congress. In so many words, Comer accuses the executives of lying under oath with misleading or untrue answers to questions. He asks for their testimony to be clarified. Comer has compared the testimony to his own staff’s findings as well as those of the Federal Trade Commission (FTC).
“PBM chief executives made statements that contradict the committee’s and the Federal Trade Commission’s findings about the PBMs’ self-benefitting practices that jeopardize patient care, undermine local pharmacies and raise prescription drug prices,” the oversight committee said in a news release Wednesday. If you look at some of the inconsistencies, Comer may have a point here. The FTC and staff work certainly raise issues of fairness and equity in how the PBMs operate.
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#pbms #drugpricing #antitrust
JAMA Opinion Piece Does Not Do Medicare Advantage Justice
An opinion article published in JAMA by David Blumenthal, M.D., M.P.P., and Gretchen Jacobson was very unfair to Medicare Advantage (MA). It seems to indicate that MA may not make healthcare more affordable than traditional Medicare fee-for-service (FFS). It says multiple surveys, including from Jacobson’s employer The Commonwealth Fund, have determined that MA enrollees find care no more affordable.
The authors try to raise potential benefits of MA, but so much is missing from their assessment – evidence of clear quality improvement, good satisfaction overall, benefit advantages, and a clear trend toward serving diverse and low-income groups. With Medicare Supplement out of reach for most retirees, MA has become the greatest social safety net program in America.
Of course, the authors also cite dubious statistics on overpayments.
JAMA piece: https://jamanetwork.com/journals/jama/article-abstract/2822916
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#medicareadvantage #medicare
https://www.managedhealthcareexecutive.com/view/is-medicare-advantage-a-good-deal-for-enrollees-
— Marc S. Ryan
