(Newswire.net — October 12, 2022) — Medicare Part D program offers outpatient prescription drug coverage to the elderly and patients with long-term liabilities under Medicare enrolled in private plans such as stand-alone prescription drug plans (PDPs) to boost the traditional Medicare benefit. The program is a joint effort by the federal government and private insurance companies, which was implemented in 2006 to help provide affordable prescription drugs for seniors on Medicare according to this site.
Medicare Part D admission to Medicare Advantage drugs has significantly gone up. In contrast, the number of those who enroll in stand-alone prescription drug plans has drastically gone down over the recent past. This has been attributed to the aggressive marketing campaigns by Medicare Advantage plans, while the stand-alone prescription drug plans did not put much effort into their promotion.
Enrollment in Medicare Part D has increased significantly as more seniors choose to enroll in Medicare Advantage, and these plans can offer prescription drugs with improved coverage. About 48 million people under the Medicare plan are enrolled under plans that offer Medicare Part D drug benefits, an equivalent to 77% (three-quarters) of the total Medicare beneficiaries. This number is expected to increase in upcoming years as enrollment in the Medicare Advantage plans is expected to increase.
The Medicare Part D program covers outpatient prescription drugs used to treat various medical conditions such as high cholesterol, cancer, high blood pressure, and many others. In 2021, about half of those enrolled under Medicare Part D are under stand-alone PDPs (50%), while the other half are enrolled under MA-PDs (50%).
In 2021, Medicare Part D enrollment was projected to reach 56% of the total Medicare beneficiaries. Irrespective of the decline in PDP availability for 2022, the beneficiaries have a better chance of getting a Medicare Advantage plan with prescription drug coverage.
Medicare Part D is a joint program between the federal government and private insurance companies. The federal government offered the Part D benefit to help boost the traditional Medicare benefit and increase enrollment in stand-alone prescription drug plans. The two types of plans are MA-PDs (Medicare Advantage Prescription Drug Plans) and stand-alone PDPs (Paid-Down Prescription Drug Plans).
This enables people with diverse medical conditions to get affordable prescription drugs. For instance, if a person has Medicare Part D drug coverage and they have medical conditions such as cancer and high blood pressure, the benefits from Medicare Part D can be used to cover the costs of drugs for both conditions.
However, if a person does not have stand-alone prescription drug plans, they will have to pay for the drugs out of their pocket because the condition may not be covered under traditional Medicare.
The coverage offered under the Medicare Part D program is a “formulary.” The Food and Drug Administration (FDA) has deemed formulary drugs safe for use. The FDA bases its approval on the research that has been conducted on those drugs. Some of the drugs on the formulary require prior approval from Medicare before they can be used.
This is because they are so expensive. For instance, a patient who wants to use a drug that costs over $100 will have to get Medicare approval before the drug can be used. The federal government pays for most of the insurance premiums. Individuals are required to pay for the cost of their prescriptions and drug insurance premiums. The Medicare Part D program has significantly reduced the prescription drug spending on beneficiaries.
The program covers outpatient prescription drugs used by people over 65 years and those under 65 years with permanent disabilities or end-stage renal disease. The Medicare Part D program also covers prescription drugs if the beneficiaries are enrolled in an approved clinical trial under the Food and Drug Administration.
To be eligible for this program, beneficiaries must have signed up and pay for their premiums to receive prescription drug coverage. However, for safety issues, the beneficiaries are not allowed to take drugs that are not on the formulary unless they get prior approval from Medicare.
The program helps cover certain services, such as home infusion therapy and durable medical equipment, through its “supplemental benefits. Supplemental benefits are also available for those with Medicare Part D and who live in a state with a stand-alone PDP program. Those with Medicare and Medicaid are not eligible for supplemental benefits.
The private insurance companies that offer part D coverage must abide by the regulations established by Medicare, as set by the Centers for Medicare and Medicaid Services. The law states that no insurance companies can take any profit from the drug payment, only the cost of drugs and services covered by Part D.
The insurance companies can only charge beneficiaries a premium if their plan covers more than the cost of drugs. Federal law prohibits insurance companies from requiring co-pays for outpatient services, except for diagnostic services and durable medical equipment supplies.
Before the government switched to monthly premium payments, it offered stand-alone PDPs to individuals who purchase prescription drug coverage from private insurance companies. Medicare provides $200 per month as initial coverage for these individuals until they pay off the deductible amount.
The traditional Medicare benefit is limited to hospital, skilled nursing facility, and hospice care covered benefits. In addition, the traditional Medicare benefits do not include the following:
- Outpatient prescription drugs.
- Physician services (like office visits, medical tests, and diagnostic examinations).
- Durable medical equipment (like wheelchairs used by patients to get around and other assistive devices).
The traditional Medicare benefit is only available to beneficiaries who do not choose to enroll in a Medicare Advantage plan.
Conclusion
Medicare Part D has substantially reduced the prescription drug spending on beneficiaries. The biggest advantage of Medicare Part D is that it has increased the benefits offered to beneficiaries and the enrollment of Medicare beneficiaries in stand-alone prescription drug plans. As noted earlier, the program has helped increase beneficiary satisfaction, and this is likely to reduce beneficiary out-of-pocket spending on pharmaceutical products.