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The Recent and Proposed Changes to Medicare Prescription Drug Coverage

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The Recent and Proposed Changes to Medicare Prescription Drug Coverage

In February, the President signed into law the Bipartisan Budget Act of 2018. It included Medicare Part D prescription coverage. A few days later, the Office of Management and Budget released the President’s fiscal year 2019 budget, which also included Medicare Part D drug coverage and Part B drug reimbursement. This summarizes the recent proposed changes according to Henry J. Kaiser Family Foundation.

  • Close the Part D coverage gap in 2019 instead of 2020, reducing beneficiary coinsurance from 30 percent to 25 percent, and increases the discount provided by manufacturers of brand-name drugs in the coverage gap from 50 percent to 70 percent, beginning in 2019. In 2019 and later years, Part D plans will cover the remaining 5 percent of costs in the coverage gap, which is a reduction in their share of costs (down from 25 percent).
  • Require Part D plans to pass on at least one-third of total rebates and price concessions to enrollees at the point of sale. Establish an out-of-pocket limit in the Part D benefit by phasing down beneficiary coinsurance in the catastrophic coverage phase from the current 5 percent level to 0 percent (no cost sharing) over four years, beginning in 2019.
  • Require Part B drug manufacturers to report average sales price data and authorize the Secretary of Health and Human Services to apply civil monetary penalties if manufacturers do not meet reporting requirements.
  • Establish an inflation limit for reimbursement of Part B drugs paid based on ASP. Currently there is no limit on updates to the ASP plus 6 percent reimbursement if the ASP increases. Under the budget proposal, reimbursement to physicians for Part B drugs paid based on ASP would be the lesser of actual ASP plus 6 percent or the inflation-adjusted ASP plus 6 percent.
  • Would authorize the HHS Secretary to consolidate coverage of certain drugs under Part D currently covered under Part B subject to a determination that there are savings to be gained.
  • Reduce wholesale acquisition cost-based payments for new Part B drugs where ASP data are not available, from 106 percent to 103 percent of WAC.-The Administration’s budget did not specify whether it took into account changes in the Bipartisan Budget Act of 2018 that would affect the costs or savings associated with proposals in the 2019 budget.

Related: How Solo Agers Are Navigating Decisions for Their Future

Read the Kaiser Family Foundation’s brief on the Part D related changes and their potential impact Part D, changes to how the donut hole will increase the amount of time people spend in it, and allowing the administration to shift medications from Part B to Part D. https://www.kff.org/medicare/issue-brief/summary-of-recent-and-proposed-changes-to-medicare-prescription-drug-coverage-and-reimbursement/

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