Medicare Enrollees Looking at Stand-Alone Part D Drug Plans Should Shop Around, Report Says

With more choices available in 2020 for Medicare stand-alone Part D drug plans, beneficiaries should compare choices, especially if they are not low income or on specialty drugs or drugs not on the payer’s formulary, according to a new analysis.
Allison Inserro
November 19, 2019
With more choices available in 2020 for Medicare stand-alone Part D drug plans, beneficiaries should compare choices, especially if they are not low income or on specialty drugs or drugs not on the payer’s formulary, according to a new analysis.

Plans vary in such a way that they can have a significant impact on an enrollee’s out-of-pocket (OOP) spending, and a report from the Kaiser Family Foundation says its analysis of plans for next year shows that millions of enrollees without low-income subsidies (LIS) will face premium and other cost increases in 2020 if they stay in their current stand-alone drug plan.

The Medicare open enrollment period ends December 7; beneficiaries can enroll in a plan that provides Part D drug coverage, either a stand-alone prescription drug plan (PDP) as a supplement to fee-for-service Medicare, or a Medicare Advantage prescription drug plan (MA-PD), which covers all Medicare benefits, including drugs.

Among the 45 million Part D enrollees in 2019, 20.6 million (46%) are in PDPs (excluding employer-only group PDPs).The average beneficiary will have a choice of 28 PDPs in 2020, 1 more option than this year and 6 more than in 2017 (a 29% increase). A total of 948 PDPs will be offered in the 34 PDP regions in 2020 (plus another 11 PDPs in the territories), an increase of 202 PDPs since 2017.

This is the third year in a row with an increase in the average number of stand-alone drug plan options.

Most Part D enrollees will be in a plan with the standard $435 deductible and will face low copayments for generic drugs but substantially higher costs for brands, including as much as 50% coinsurance for non-preferred drugs.

Two-thirds of Part D enrollees who are not receiving LIS (9.0 million individuals) will see their monthly premium increase if they stay in their same plan; one-third (4.3 million) will see their premium fall.

PDP premiums will vary widely across plans next year; among the 20 PDPs available nationwide, average premiums will range 6-fold from a low of $13 per month for Humana Walmart Value Rx Plan to a high of $83 per month for Express Scripts Medicare Choice.

For example, the 1.9 million non-LIS enrollees in the Humana Walmart Rx Plan, the third-most popular PDP in 2019, will see their monthly premium double in 2020, from $28 to $57, unless they switch plans. In this case, it is due to plan changes and consolidations, with Humana consolidating 2 of its PDPs (Humana Walmart Rx and Humana Enhanced) into 1 PDP for 2020 and renaming it Humana Premier Rx.

The estimated national average monthly PDP premium for 2020 is projected to increase by 7% to $42.05, weighted by September 2019 enrollment. The actual average premium may be lower if current enrollees switch to, and new enrollees choose, lower-premium plans during open enrollment.

In 2020, all PDPs will include 5 or 6 tiers for covered generic, brand-name, and specialty drugs, and cost sharing other than the standard 25% coinsurance, similar to this year. More than 8 in 10 PDPs (86%) will charge a deductible, with most PDPs charging the standard deductible.

Among all PDPs, median cost sharing is $0 for preferred generics and just $3 for generics, but $42 for preferred brands and 38% coinsurance for non-preferred drugs (the maximum allowed is 50%), plus 25% for specialty drugs (the maximum allowed is 33%).

Medicare beneficiaries receiving the LIS will have a choice of 7 premium-free PDPs in 2020, on average, 1 more than in 2019. In 2020, nearly 20% of all LIS PDP enrollees who are eligible for premium-free Part D coverage (1.3 million LIS enrollees) will pay Part D premiums averaging $18 per month unless they switch or are reassigned by CMS to premium-free plans.

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