With PPACA Implementation, Medicare Beneficiaries Receive Coverage Gap Discounts; Will Not See an Increase in 2012 Premium Costs

According to a recent announcement from the US Department of Health and Human Services (HHS), Medicare premiums for prescription drugs will not see a rise in cost in 2012, and in fact, will experience a modest decrease. For patients with Medicare, this means that, in 2012, the average Medicare prescription drug plan premium will be at $30, compared to $30.76 in 2011. Medicare's decision to keep the premiums at a stable cost next year derives from the Medicare Part D plan bids for the 2012 plan year.¹ Medicare appears to be able to keep its prescription drug premiums at low rates due to competition between private insurance plans and the increase in use of generic therapies; in particular, with many brand name drugs positioned to go generic in the next few years, it is likely that Medicare premiums will continue to stay in this trend.

In addition to keeping Medicare prescription drug premiums at a similar rate, HHS announced that more Medicare beneficiaries "are receiving discounts on prescription drug costs."¹ With the passage of the Patient Protection and Affordable Care Act (PPACA) last year, Medicare Part D plans will increasingly pay more and more of the cost of drugs while patients are in the coverage gap between 2011 and 2020. As this phase-in approach progresses, manufacturers will provide 50% coverage, and ultimately, Medicare Part D plans and beneficiaries will share the remaining 50% by splitting to 25% each.

HHS' announcement comes as new data are now available showing that in 201, approximately 900,000 Medicare beneficiaries received a 50% discount on prescription drug costs after entering into the coverage gap. Specifically, this new data reveal that 899,000 Medicare beneficiaries received a 50% discount on covered brand name drugs while in the Medicare Part D coverage gap, representing a jump of 420,000 beneficiaries who received this benefit in just the month of June. For Medicare beneficiaries, such out-of-pocket savings has translated into a dollar amount of $461 million through June 2011, representing a significant savings increase from $260 million through May 2011.¹

In a news release, the Centers for Medicare & Medicaid Services (CMS) Administrator, Donald M. Berwick, MD, was quoted saying: "The Affordable Care Act continues to improve the value of the drug coverage people with Medicare will receive next year. Out-of-pocket costs will be lower thanks to discounts on brand name prescription drugs and increasing generic coverage for people in the donut hole. Beneficiaries should still carefully compare their current plan's coverage and quality with what is being offered in 2012 when that information becomes available in the fall."¹

HHS and CMS' new data also reveals that as of now in 2011, approximately 17 million Medicare beneficiaries were recipients of free preventive benefits. Through PPACA legislation, Medicare beneficiaries are now able to be seen by healthcare providers for recommended preventive services and an annual wellness visit (a new offering) at no cost. Specifically, from January to July 2011, almost 51.5% of Medicare beneficiaries used one or more of Medicare's free preventive services and over 1 million Medicare patients received a free annual wellness visit. To further spread awareness about the availability and significance of healthcare prevention services, Medicare launched its new "Share the News. Share the Health" campaign in June 2011. With regional and national television and radio public service announcements, Medicare has been focused on promoting these new benefits through its campaign to Medicare patients and healthcare providers. In addition, CMS has developed a "Prevention Advisory," as well as resources specific to healthcare providers, which are available on Medscape.¹

In a CMS news release, HHS Secretary Kathleen Sebelius was quoted: "The Affordable Care Act is delivering on its promise of better healthcare for people with Medicare. People with Medicare who hit the donut hole are paying less for their prescription drugs, 17 million Americans have received free preventive services, and prescription drug premiums will remain low. These are important steps that are making a difference in the lives of millions of Americans right now."¹

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While the provisions of PPACA legislation will provide some relief to Medicare beneficiaries, it may be important to continue to monitor the impact of cost-sharing changes to both oncology patients and practices, as well as, provide communication about the importance of preventive services.

For more information on HHS/CMS' recent announcement and Medicare's Share the News. Share the Health campaign, please visit the following resources:
http://www.hhs.gov/news/press/2011pres/08/20110804a.html
http://www.medicare.gov/share-the-health/

References:

¹ http://www.hhs.gov/news/press/2011pres/08/20110804a.html