Medicare’s uncapped drug costs still bite into budgets
Unlike commercial plans that cap members’ out-of-pocket drug spending annually, Medicare has no limit for prescription medications in Part D, its drug benefit. With the cost of specialty drugs increasing, some Medicare beneficiaries could owe thousands of dollars in out-of-pocket drug costs every year for a single drug.
Recent proposals by the Trump administration and Sen.
The 2006 introduction of the Medicare prescription drug benefit was a boon for seniors, but the coverage had weak spots. One was the so-called “doughnut hole” -- the gap beneficiaries fell into after they accumulated a few thousand dollars in drug expenses and were on the hook for the full cost of their medications. Another was the lack of an annual cap on drug spending.
Legislative changes have gradually closed the doughnut hole so that, this year, beneficiaries no longer face a coverage gap. In a standard Medicare drug plan, beneficiaries pay 25 percent of the price of their brand-name drugs until they reach
It’s that ongoing 5 percent that hits hard for people, such as Gervich, who take expensive medications.
His 40-milligram dose of Copaxone costs about
That
“I feel like I’m being punished financially for having a chronic disease,” he said. He has considered discontinuing Copaxone to save money.
His drug bill is one reason Gervich,, a self-employed certified financial planner, has decided not to retire yet, he said.
An annual cap on his out-of-pocket costs “would definitely help,” Gervich said.
Drugs like Copaxone that can modify the effects of the disease have been on a steep upward price trajectory in recent years, said
Specialty-tier drugs for multiple sclerosis, cancer and other conditions -- defined by Medicare as those that cost more than
Just over 1 million Medicare beneficiaries in Part D plans who did not receive low-income subsidies had drug costs that pushed them into catastrophic coverage in 2015, more than twice as many as the 2007 total, an analysis by the
“When the drug benefit was created, 5 percent probably didn’t seem like that big a deal,” said
The lack of a spending limit for the Medicare drug benefit sets it apart from other coverage. Under the Affordable Care Act, the maximum amount someone generally owes out-of-pocket for covered drugs and other medical care for this year is
The Medicare program doesn’t have an out-of-pocket spending limit for Part A or Part B, which cover hospital and outpatient services, respectively. But beneficiaries can buy supplemental Medigap plans, some of which pay coinsurance amounts and set out-of-pocket spending limits. Medigap plans, however, don’t cover Part D prescription plans.
Counterbalancing the administration’s proposal to impose a spending cap on prescription drugs is another that could increase many beneficiaries’ out-of-pocket drug costs.
Currently, brand-name drugs that enrollees receive are discounted by 70 percent by manufacturers when Medicare beneficiaries have accumulated at least
Still, beneficiaries would have to pay more out-of-pocket to reach the catastrophic spending threshold. Thus, fewer people would likely reach the catastrophic coverage level where they could benefit from a spending cap.
“Our concern is that some people will be paying more out-of-pocket to get to the
“It’s kind of a mixed bag,” said Cubanski of the proposed calculation change. “There will be savings for some individuals” who reach the catastrophic phase of coverage. “But for many there will be higher costs.”
For some people, especially cancer patients taking chemotherapy pills, the lack of a drug-spending cap in Part D coverage seems especially unjust.
These cutting-edge targeted oral chemotherapy and other drugs tend to be expensive, and Medicare beneficiaries often hit the catastrophic threshold quickly, said Brooks-Coley.
Armstrong-Bolle, 68, paid
If she were getting traditional drug infusions instead of taking an oral medication, her treatment would be covered under Part B of the program and her coinsurance payments could be covered.
“It just doesn’t seem fair,” she said.
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