Avalere Analysis on MedPAC’s Proposed Part D Reforms to Modify Beneficiary Cost Sharing

Summary

Avalere recently analyzed two different Part D policy proposals outlined in The Medicare Payment Advisory Commission (MedPAC) June 2016 report to Congress.

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They included the following:

1. Implementing an out-of-pocket maximum in Part D, whereby beneficiaries would not be responsible for any cost sharing in the catastrophic portion of the benefit. We refer to this policy as the “OOP Cap.”

2. Excluding the brand manufacturer coverage gap discounts from the calculation of a beneficiary’s true-out-of-pocket (TrOOP) costs. We refer to this policy as the “TrOOP Policy.”

Specifically, we wanted to understand how these proposals would impact out-of-pocket costs for beneficiaries. We found that if both policies are implemented simultaneously, out-of-pocket spending for almost 1 million Part D enrollees would increase while out-of-pocket costs for about 100,000 beneficiaries would decrease each year. With the OOP cap, over a million beneficiaries each year would have lower spending and a comparable number of beneficiaries would have higher spending under the TrOOP policy.

Download the full report here.