Analysis Underscores the Need for ‘Any Willing Pharmacy’ Policy in Part D

National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey, RPh, MBA issued the following statement in response to the detailed preferred pharmacy access analysis released by the Centers for Medicare & Medicaid Services (CMS) and conducted in response to concerns raised by NCPA, beneficiary advocates and others:

We appreciate Medicare officials acting on the concerns that NCPA members, beneficiaries, patient advocacy organizations and members of Congress have raised. We are still reviewing the full CMS analysis. Our initial reaction is that more work must be done in this area. The CMS analysis documents progress yet still identifies many plans that are ‘access outliers’ that impact a significant number of beneficiaries. Indeed, this total could be higher because CMS excluded from this analysis plans granted waivers to the retail pharmacy convenient access standard requirement. The marketing disclaimers, while appreciated, come well after the 2016 enrollment period concluded and six weeks into the plan year.

In addition, the format in which this data has been posted should be more accessible to the average Medicare beneficiary or their caregiver. Information of this importance should be incorporated into Medicare Plan Finder prominently – and before beneficiaries research their enrollment decisions.

Beneficiaries need swifter relief and protection. To that end, we encourage Medicare officials to implement an ‘any willing pharmacy’ policy and Congress to enact H.R. 793 / S. 1190. This would allow beneficiaries in medically under-served areas to access their prescription drugs at a community pharmacy that accepts the drug plan’s terms and conditions and can serve those patients. Medicare officials have already acknowledged that this is ‘the best way to encourage price competition and lower costs in the Part D program.

Choices abound as Medicare open enrollment approaches

Open enrollment for Medicare Part D and Advantage plans begins Oct. 15, and experts say enrollees will have many options. Most subscribers will have at least two dozen drug plans from which to choose, says Tricia Neuman, director of the Program on Medicare Policy at the Kaiser Family Foundation. Premiums for many subscribers will drop, according to an Avalere Health analysis. For Medicare Advantage, selection will also remain robust and most subscribers will not see premium increases. Kaiser Health News (9/30)

Medicare Advantage Premiums Climb

The number of $0 premium Medicare Advantage plans will decrease 19% from 2014 to 2015, according to HealthPocket. The analysis is based on the federal government’s 2015 Medicare insurance data. The average Medicare Advantage premium will be $62.69 in 2015, which is 2% higher than in 2014. It is also 94% higher than the average of $32.26 that the government reported before changing how it calculates average premiums. The 2015 premium average is based on anticipated plan enrollment rather than average premiums of all Part D plan options. The report includes the following statistics:
• The average drug deductible for 2015 Medicare Advantage plans is $129.87, which is 94% higher than in 2014. The maximum allowable drug deductible is $320 in 2015.
• The average all Medicare Part D drug plan for 2015 is $53.90, which is 1% lower than in 2014. However, it is 68% higher than the average premium before the government changed how it calculates average premiums.
• The average deductible for 2015 Medicare Part D drug plans is $157.91, which is 1% higher than in 2014. The maximum allowable Medicare Part D deductible is $320 in 2015.
• The cap on out-of-pocket costs for covered drug expenses in Part D and Medicare Advantage plans is $4,700 in 2015. This limit is $150 higher than in 2014. After this out-of-pocket threshold is reached, the beneficiary gets catastrophic coverage with lower drug cost-sharing.
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Top Trends in Medicare Part D

Now in its ninth year of operation, the Medicare Part D program has had consistently high levels of plan participation, offering dozens of plan choices for beneficiaries in each region and broad access to generic and brand name drugs. But there are some sobering trends beneath the surface, according to a report by the Kaiser Family Foundation. Cost and access trends could pose challenges for Part D enrollees. Although premiums have been flat for several years, average premiums have increased nearly 50% from 2006 to 2014. Median cost sharing for brand-name drugs has also increased. Finally, many low-income beneficiaries are paying steadily higher premiums for coverage when they could be enrolled in premium-free plans.

Sixty-two percent of Part D enrollees are in PDPs, but enrollment in MA-PD plans is growing faster, representing half of the net increase in enrollment from 2013 to 2014. About 6.5 million Medicare beneficiaries with drug coverage from their former employers now get that coverage through a Part D plan designed for that firm’s retirees. Enrollment in employer plans has quadrupled since 2006, partly due to changes in law that took effect in 2013.

In 2014, three Part D sponsors account for half of all Part D PDP and MA-PD enrollees. UnitedHealthCare, Humana, and CVS Caremark have enrolled half of all participants in Part D, which is relatively unchanged from 2006. UnitedHealthCare and Humana have held the highest shares of enrollment since the program began while enrollment in CVS Caremark has grown through the acquisition of other plan sponsors. UnitedHealthCare has maintained the top position for all nine years of the program, and provides coverage to more than one in five PDP and MA-PD enrollees in 2014.

Average monthly PDP premiums have been flat since 2010; premiums for some of the most popular plans increased for 2014; and premiums for other popular plans fell. On average, PDP enrollees pay premiums of $37.75 per month in 2014. However, PDP premiums vary widely even for plans with equivalent benefits. Premiums range from $12.80 to $111.40 a month for plans offering the basic Part D benefit. UnitedHealthCare’s AARP MedicareRx Saver Plus PDP, which was new in 2013, raised its premiums by 54% in 2014 (an average increase of about $8 per month). In contrast, WellCare’s Classic PDP lowered its premium by 38% (an average decrease of about $13 per month) in 2014.

Part D enrollees in MA-PD plans pay lower premiums on average ($14.70) than those in PDPs. Cost sharing for brand-name drugs has been relatively stable in recent years, but has risen substantially since the start of Part D.  MA-PD plan enrollees generally have somewhat higher cost sharing than do PDP enrollees. Cost sharing for brands increased by about 50% from 2006 to 2014 for beneficiaries in PDPs and about 70% for those in MA-PD plans.

Median cost sharing in a MA-PD is $45 for preferred brands and $95 for non-preferred brands plans. Median cost sharing in a PDP is $40 for preferred brands and $85 for non-preferred brands. Seventy-six percent of PDPs and 75% of MA-PDs use five cost-sharing tiers including preferred and non-preferred tiers for generic drugs, preferred and non-preferred tiers for brand drugs, and a tier for specialty drugs. Four-tier arrangements were most common until 2012 when plans began shifting toward the five-tier cost-sharing design.

Part D plans typically use specialty tiers for high-cost drugs and charge coinsurance of from 25% to 33% during the benefit’s initial coverage period, as in previous years. These initial high out-of-pocket costs may create a financial barrier to starting use of specialty drugs, which are expected to be a significant cost driver for Medicare. Users are likely to reach the benefit’s catastrophic threshold in a short period, and see their coinsurance reduced to 5%.

The number of Part D stand-alone drug plans with a preferred pharmacy network grew from 7% in 2011 to 72% in 2014. Enrollees have lower cost sharing with preferred pharmacies. However, in some plans, there is no preferred pharmacy within a reasonable travel distance, which could make it hard for enrollees to take advantage of the lower cost sharing.

Only 5% of PDP enrollees are in plans with the highest star ratings (four stars or more out of five). More than half are in plans with 3.5 stars. Nearly one-fourth of are in plans with fewer than three stars; plans at this level for three years in a row can be removed from the program. For more information,

ACA Has Helped Seniors Save $8.9 Billion On Prescription Drugs

Seniors and people with disabilities with Medicare prescription drug plan coverage have saved $8.9 billion on their prescription drugs thanks to the Affordable Care Act, according to new data by the Centers for Medicare & Medicaid Services (CMS). At the same time, these seniors will be free to use more of their Social Security benefit cost of living adjustment on what they choose because the Medicare Part B premium will not increase in 2014, thanks to the health care law’s successful efforts to keep cost growth low.

Since the Affordable Care Act was enacted, more than 7.3 million seniors and people with disabilities who reached the “donut hole” in their Medicare Part D (Medicare Prescription Drug Coverage) plans have saved $8.9 billion on their prescription drugs, an average of $1,209 per person since the program began. During the first 10 months of 2013, nearly 3.4 million people nationwide who reached the coverage gap — known as the donut hole. This year they have saved $2.9 billion, an average of $866 per beneficiary. These figures are higher than at this same point last year, when 2.8 million beneficiaries had saved $1.8 billion for an average of $677 per beneficiary. CMS recently announced that the Medicare’s Part B premium will not increase in 2014, and that the last five years have been among the slowest periods of average Part B premium growth in the program’s history. The Part B deductible will also not increase, having decreased in 2014. The Part B premium and deductible for 2014 are 15% below what was projected in 2010, the year the Affordable Care Act was enacted.

Also as a result of the Affordable Care Act, Medicare Advantage and Prescription Drug Plans remain stable and strong. Earlier this year, CMS announced that the average Medicare Advantage (MA) premium in 2014 is projected to be $32.60. CMS also estimated that the average basic Medicare prescription drug plan premium in 2014 is projected to be $31 per month, holding steady for 4 years in a row. The deductible for standard Part D plans will decline by $15 in 2014, to $310. Since the passage of the Affordable Care Act, average MA premiums are down by 9.8%.

Since enactment of the Affordable Care Act, the life of the Medicare trust fund has been extended by nearly ten years, till 2026.
For state-by-state information on savings in the donut hole, please visit:

Preferred Pharmacy Networks Are Not Always Cheaper

Negotiated prices at preferred retail pharmacies are sometimes higher. In a recent study, CMS compared the negotiated prices at non-preferred retail pharmacies for Part D sponsors with both preferred and non-preferred networks. CMS looked at a one-month sample of negotiated pricing for the top 25 brands and 25 generics in the Part D program. Pricing at preferred retail pharmacies is lower than at non-preferred network pharmacies, but when mail and retail pharmacy costs are included, some sponsors’ preferred network pharmacies offer somewhat higher negotiated prices compared to their non-preferred network pharmacies.

In March 2012, only about 11% of the beneficiaries in standalone Part D plans were enrolled in contracts that CMS identified as having higher preferred than non-preferred prices. In its report CMS added, “From 2012 to 2013, the enrolled population in PDPs with a preferred network has doubled. Thus, we believe the impact of higher preferred network prices on the program, as a whole is likely to become increasingly significant. Since we believe higher negotiated prices in network pharmacies violate the intent of § §1860D-4 (b)(1)(B), we are considering options for clarifying our requirements in future rulemaking.”

Medicare Preferred Pharmacy Networks Offer Big Savings

Preferred pharmacy networks will reduce federal Medicare Part D costs up to $9.3 billion during the next 10 years, according to a study by Milliman for the Pharmaceutical Care Management Association (PCMA). “It was never in question that seniors love low-premium, low-copay Part D plans with preferred pharmacy networks. Now this game-changing study shows that preferred pharmacy networks save the federal government billions as well,” said PCMA President and CEO Mark Merritt.

The study includes these major findings:
* Preferred pharmacy network plans are expected to reduce federal Medicare spending by about $870 million in 2014.
* Over the next 10 years, preferred pharmacy network plans are expected to reduce federal Medicare spending by $7.9 to $9.3 billion.
* The largest two-year decrease in federal direct subsidies in the history of the Part D program coincides with the rapid adoption of preferred pharmacy network plans and the increased use of generic drugs.
* Post point-of-sale price concessions cause a greater reduction in federal Part D costs than equivalent drug discounts at the point-of-sale.

Separately, Part D seniors in plans with preferred pharmacy networks are overwhelmingly satisfied, citing lower costs, convenient access to pharmacies and other benefits, according to a survey from Hart Research Associates. The survey found that 85% of seniors surveyed are satisfied with their preferred network plan. In addition, the survey found that four in five seniors would be disappointed if their preferred network plan is eliminated.

According to a recent analysis of Part D data, more than 70% of Medicare Part D plans will feature a preferred pharmacy network in 2014. There are more drugstores in the U.S. than McDonald’s, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts combined, creating a highly competitive environment.

Medicare Drug Coverage Doesn’t Ensure Easy Access to Meds

Consumers with traditional Medicare and Medicare Advantage plans face various hurdles in getting their medications, according to an analysis by HealthPocket. Some plans cover more than twice the number of drugs as do other plans. For 16% of drugs, plans limit the quantity that members are allowed to purchase at one time; 18% of drugs requir prior authorization; and nearly 2% requir step therapy in which a member must first try a less expensive medication. Steve Zaleznick of HealthPocket said, “Annual enrollment is coming up in October…The first step…is to ensure that the drugs they take are on the plan’s formulary, and the second is to look at what restrictions they can face in actually getting the medication in hand.”

Each Medicare plan has a formulary, which lists the drugs that are covered and the consumer’s out-of- pocket costs for those medications in a given year. A consumer would have to pay the full cost of a drug that’s not on the formulary. Plans can restrict access to drugs that are on the formulary by limiting the quantity, requiring prior authorization, and mandating step therapy.

Kaiser plans have no quantity limits or step therapy rules and only 3.5% of its drugs are subject to prior authorization. This model can prove useful to industry and government for new and reformed Medicare and private plans that come online through the Affordable Care Act, according to the analysis. For more information, visit

More People Will Get Drug Coverage, But at Higher Costs

Based on early health insurance rate filings, consumers who choose the lower cost Bronze and Silver plans are likely to pay more for prescription drugs. If trends continue, consumers with prescription drug coverage can expect to pay an average of 34% more out-of-pocket for their prescriptions, according to a report by HealthPocket.

The good news is that drug coverage will be considered an essential health benefit in all health plans. The bad news is that out-of-pocket prescription costs are likely to rise substantially from the average annual per capita expenditure of $758.

“Americans are going to need to pay very, very close attention to what plans offer to minimize out-of-pocket increases for medications. When it comes to drug costs and changes in our newly reformed health care system, the fine print really matters,” said Kev Coleman, head of Research & Data at HealthPocket.

The analysis also finds that, in most cases, the higher-end Gold and Platinum plans have lower drug cost sharing. However, experts expect the less expensive Bronze and Silver plans with higher out-of- pocket drug costs to be the most popular for cost-conscious consumers. Coinsurance rates for higher cost medications, which are typically injected, will vary widely under each metal plan. For more information, visit

Seniors Like Their Medicare Part D Coverage

Ninety percent of seniors are satisfied with their Medicare prescription drug coverage (Part D), according to a survey by Medicare Today and KRC Research. Satisfaction with Part D has increased from 78% to 90% since the program was implemented. Ninety-six percent say their coverage works  well, and nearly three in four seniors say it works very well.

“It’s very rare to get nine out of 10 people to agree on anything, but Medicare Part D has sustained that level of acceptance and popularity. Beneficiaries view  Part D as affordable, reliable and user-friendly.  It’s become an  essential component of seniors’ healthcare,” said Mary R. Grealy, Chairman of Medicare Today and  President of the Healthcare Leadership Council.

Last Updated 09/22/2021

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