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1 in 5 Medicare Beneficiaries Taking a Part D Cancer Therapy Reached Catastrophic Level in 2017

Summary

Avalere analysis finds that a larger proportion of beneficiaries taking a Part D cancer therapy reached catastrophic compared to all Part D enrollees.

A new Avalere analysis provides information about the characteristics and out-of-pocket (OOP) spending experience of Medicare beneficiaries taking a Part D cancer therapy in 2017.

In 2017, a total of 1.2 million beneficiaries filled a script for a Part D-covered cancer drug.1 Of this group, about a quarter (24%) were recipients of the low-income subsidy (LIS), while the remaining 76% were non-LIS.2 In comparison, 29% of the overall Medicare Part D population are LIS recipients.3 The LIS provides premium and cost-sharing assistance to those who qualify, and beneficiaries who receive the LIS have reduced cost sharing throughout the benefit.

Compared to the overall Part D population, beneficiaries taking a Part D cancer drug were more frequently enrolled in a standalone Prescription Drug Plan (PDP) (63% of beneficiaries taking a Part D cancer drug vs 59% of all Part D beneficiaries). The remaining 37% of beneficiaries who took a Part D cancer drug were enrolled in a Medicare Advantage Prescription Drug Plan (MA-PD)—a private plan that offers combined coverage for all Medicare benefits (Figure 1).

Excluding those in employer plans, PDP enrollees who took a Part D cancer medication were more often enrolled in an enhanced PDP than the general PDP-enrolled population (47% of PDP cancer enrollees vs 41% of all PDP enrollees) (Figure 1). Enhanced plans offer coverage that is actuarially more generous than basic plans and may offer benefits such as coverage of more drugs or lower cost-sharing for some drugs.

Out-of-Pocket Spending

Medicare beneficiaries with spending above an annual threshold ($5,100 in true out-of-pocket (TrOOP) costs in 2019) reach the catastrophic phase of the Part D benefit.4 Once in catastrophic, non-LIS beneficiaries pay no more than 5% of the total cost for any Part D drugs filled through the end of the year.

About one fifth (21%) of all Part D beneficiaries who took a Part D-covered cancer therapy (256,368 enrollees) reached catastrophic in 2017, compared to 8% of all Part D beneficiaries. Over half (52%) of the population of beneficiaries taking a Part D cancer therapy are non-LIS, compared to 29% of all Part D enrollees who reached catastrophic.5

In 2017, beneficiaries who took a Part D cancer therapy spent a total of $1.08 billion in OOP costs for their Part D medications. Over half (54%) of this total OOP spending was incurred by the 11% of non-LIS beneficiaries who reached the catastrophic phase of the benefit that year (133,580 beneficiaries in total).6 Excluding beneficiaries in employer plans, non-LIS beneficiaries taking a Part D cancer therapy and who reached the catastrophic phase of the benefit in 2017 spent an average of $5,515 OOP for their Part D medications in 2017. Cancer therapies accounted for the majority (71% or $3,917) of this average OOP spending.

Among this population, 32% reached catastrophic within the first 2 months of the year, with the majority of their OOP spending occurring in the first month of the year.

Non-LIS Beneficiaries Reaching Catastrophic by State

The share of non-LIS enrollees without employer plans taking a Part D cancer medication who reached catastrophic also varied by state, ranging from 11.0% in Montana to 18.7% in New York.

Avalere collaborated with the American Cancer Society Cancer Action Network (ACS CAN) on this analysis under the terms of a CMS Research Data Use Agreement (DUA) with funding to conduct the analysis provided by ACS CAN.

Methodology

Avalere used 2017 MediSpan data to identify National Drug Codes (NDCs) for antineoplastic agents based on the Generic Product Identifier (GPI) classification system. Avalere then identified beneficiaries with a full 12 months of Part D enrollment filling at least one of the drugs with these NDCs in the 2017 Part D Prescription Drug Event (PDE) data, under the terms of a Centers for Medicare & Medicaid Services (CMS) research data use agreement (DUA). Avalere excluded from this analysis beneficiaries with inconsistent LIS status and those switching between PDPs and MA-PDs. Avalere also excluded beneficiaries who received low-income subsidy payments that were classified as non-LIS in Medicare’s Master Beneficiary Summary File (MBSF) and excluded beneficiaries in the US territories. Avalere excluded enrollees in employer group waiver plans (EGWPs) unless noted otherwise.

1Only includes beneficiaries with 12 full months of enrollment.

2Data includes beneficiaries in employer plans.

3Enrollment estimates for all Part D beneficiaries from MedPAC March 2018 Report to Congress.

4A beneficiary’s actual OOP costs along with payments made by manufacturers for brand drugs during the coverage gap count toward TrOOP.

5Data includes beneficiaries in employer plans. Estimates for all Part D beneficiaries from MedPAC March 2018 Report to Congress.

6Data includes beneficiaries in employer plans.

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