SummaryAvalere analysis finds that out-of-pocket (OOP) spending on prescription drugs for beneficiaries with multiple sclerosis (MS) could be as high as one third of their income.
Despite robust OOP spending protections for low-income Medicare Part D beneficiaries (e.g., income less than 135% Federal Poverty Level (FPL)), the vast majority of Part D beneficiaries–70% of all Part D enrollees in 2017–remain at risk for high OOP expenses that may be as high as 50% of the cost of a drug. Beneficiaries with conditions for which the standard of care calls for a higher cost drug but where a cheaper but viable alternative does not exist–such as MS–are particularly at higher risk for OOP expenses since these drugs are often placed on formulary tiers with over 40% coinsurance.
This OOP liability can present affordability challenges for beneficiaries who have limited income but are not eligible for low-income subsidy (LIS) programs. In 2017, for example, the estimated average yearly Social Security benefit amount was $17,536. Additionally, 61% of social security recipients aged 65 years or older relied on their benefits for half or more of their total yearly income.
Avalere analysis finds that beneficiaries diagnosed with MS who do not receive assistance through the LIS program and filled at least 1 prescription for a medication (30-day fill) in a year were subject to significant annual OOP costs.
Specifically, beneficiaries with incomes under 300% of FPL faced average OOP costs of $5,820, accounting for nearly a quarter of their annual income. Overall, the annual drug OOP costs for Part D enrollees diagnosed with MS ranged from $5,200 to $8,400.
|Non-LIS Income Group||Income Range||Average Annual OOP||Range of Annual OOP as a Percent of Income||Average Annual OOP as a Percent of Income|
|Under 300% FPL||$18,090–$36,180||$5,820||16%–32%||24%|
|300%–500% FPL||$36,180–$60,300||$ 6,860||11%–19%||15%|
|Over 500% FPL||> $60,300||$6,170||<=10%||10%|
Federal Poverty Level (2017): $12,060 (single-person household)
Avalere analyzed 2017 Medicare data, specifically 100% Part A and Part B claims and Part D prescription drug event (PDE) data under a research data use agreement with CMS. We analyzed a cohort of patients representing less than 20% of total Medicare beneficiaries; this cohort included beneficiaries diagnosed with MS and taking drugs for MS treatment. Avalere calculated the OOP costs associated with all medications for these beneficiaries from the PDE records. Avalere then used income data from Acxiom’s InfoBase® Geo identified at the 9-digit ZIP-code level to segment beneficiaries into income groups by FPL ratio. Avalere limited the analysis to beneficiaries who are not receiving assistance from the LIS program.
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