Medicare Advantage Deductibles Fall

For the first time since inception of the Part D program, the deductible for the defined standard plan will be lower in 2014 than in previous years. Since enactment of the Affordable Care Act, Medicare Advantage enrollment is up by 25% while premiums have fallen. “Medicare Advantage will remain a strong option for beneficiaries under the policies,” said Jonathan Blum, CMS acting principal deputy administrator.” CMS announces the following:

 Lower Out-of-Pocket Drug Spending: The deductible and out-of-pocket limits for Part D will be lower in 2014. Beneficiary costs will be further reduced for Medicare enrollees who have reached the prescription drug coverage gap, or “donut hole.” In 2014, enrollees in the donut hole will get coverage and discounts of 52.5% on covered brand name drugs and coverage of 28% on covered generic drugs. To date, 6.3 million beneficiaries have saved $6.1 billion on prescription drugs.

• Greater Protection for Beneficiaries: Total beneficiary cost increases are limited to $34 per member, per month for 2014 (down from $36 per member per month in previous years). Part D plans will require their network pharmacies to get enrollee consent before each delivery, unless the enrollee personally requests the refill. CMS strongly encourages Part D plans to implement this consent requirement for the remainder of this year.

 Payments to Plans: The final estimate of the combined effect of the Medicare Advantage Growth percentage and the fee-for-service growth percentage is 3.3%. These growth rates assume a zero% change for the 2014 physician fee schedule by taking into account the likely Congressional override of the schedule physician payment reduction. Over the past year, the number of four and five star plans has increased significantly, with 127 such plans in Medicare Advantage in 2013, 21 more than the prior year. CMS is continuing to align Medicare Advantage benchmarks with Medicare fee-for-service costs and adjust for diagnostic coding differences among Medicare Advantage plans and Medicare fee-for-service providers.

• Improved Risk Adjustment Model: CMS will implement the proposed clinically revised risk adjustment model, which limits opportunities for Medicare Advantage plans to be paid more for better coding improvements. As a transitional step, the risk scores for 2014 will be a blend of those calculated under the 2014 and 2013 models.

 Improved Coordination of Care: In coordination with the Million Hearts initiative, plans are encouraged to improve access and adherence to anti-hypertensive medications by expanding their target enrollee populations for medication therapy management.

For more information, including the 2014 statutory updates to the annual parameters for the defined standard Part D prescription drug benefit, visit

Last Updated 05/25/2022

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