Medicare Part D: Navigating Plans and Potential Gaps in 2025

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Starting in 2025, changes to the Medicare Part D benefit under the Inflation Reduction Act are expected to take effect, including a $2,000 out-of-pocket cap, increases in the share of drug costs above the cap paid for by Part D plans and drug manufacturers, and a reduction in Medicare’s share of these costs. However, this will also include a 26% decline in prescription drug plans. This will result in an estimated 12 standalone plans in addition to a number of Medicare Advantage drug plans.¹

Corey Ford, VP, reimbursement, policy insights, Cencora, sat down with Pharmaceutical Commerce to discuss how the reduction in prescription plans could impact beneficiaries, particularly in rural areas and regions with limited access to healthcare.

“I think we expected this because of some of the changes in Part D liability going into next year due to the redesign under the Inflation Reduction Act,” said Ford. “But I think it is important to note that there still are choices in the marketplace. On average, it’s around 15 standalone prescription drug plans, but that doesn’t mean there won’t be an impact, particularly on rural populations and those with limited access. I think it’s important to note that we may see more basic prescription drug plans compared to enhanced ones, which could impact access in terms of access for these beneficiaries. We also need to be on the lookout for is a certain type of prescription drug plan; those that can receive auto-enrolled or reassigned low-income subsidies, because we’re seeing a decline there as well.”

There will also be a lower number of Part D Low-Income Subsidy (LIS) plans available next year. According to KFF, individuals who take home less than 150% of poverty—or $22,590 for individuals/$30,660 for married couples—currently qualify. The 115 plans available at the beginning of next year will represent a 9% reduction, the lowest number of available plans since the implementation of Part D.¹ According to Avalere, ten states will only have two LIS plans to choose from.²

Ford offered his thoughts on how the diminishing options could affect access to care for low-income patients moving forward.

“This is something that we have been watching,” said Ford. “A number of patient advocates have been concerned about this trend for a few years now, even before we got to this redesign. Obviously, under the Inflation Reduction Act, we’re seeing reductions overall in out-of-pocket costs for the standard beneficiary and also an expansion of the LIS.

“That being said, that’s really only focused on affordability challenges. From the data we’ve seen, there are a handful of states that have two or less options available. The challenge with this is that beneficiaries within these plans might not be able to get a product in another plan if it’s not covered in their current plan, making it a challenge when it comes to access. So, those enrolled in the LIS can only enjoy those low copays if they have access to the product.”

Ford then suggested a number of strategies for addressing potential gaps in coverage.

“When we think about this from a strategic perspective, the most important area to focus on is patient education,” he continued. “There still are choices out there and we need to make sure that patients understand their options because of the fundamental changes we’re seeing in 2025. There are a number of stakeholders that have a roll in this, including patient advocates, patient organizations, HDPs, and even individuals on the pharma side. This program should be designed to help them understand what the best plan for them would be going into next year. Most of the time, beneficiaries shop on price and the premium of a plan.”

For patients looking to enroll in Medicare Part D, eligible plans can be viewed on the Medicare website or through support via an independent insurance broker. According to Forbes Health, it is important for patients who qualify that the list of covered medications for whatever prescriptions that they take are covered by the plan they are considering.³

In an interview with Pharmaceutical Commerce, Alan Balch, CEO, Patient Advocate Foundation, offered some tips for patients currently navigating Medicare Part D.

“There are a number of options,” said Balch. “Depending on where you live, there are close to 2,000 plans across the country offering a Part D benefit. They all have a different combination of things included such as coverage, premiums, and different deductibles. Once you have it, there’s the usual trappings of any insurance coverage. I think the thing that’s a little more recent to Medicare is the increase in utilization management. That covers a number of ways that insurance companies would stop, halt, or deny a prescription based on different protocols such as prior authorization. In Medicare Part D, 32% of drugs are restricted. It doesn’t necessarily mean denial. A lot of times, these prior authorizations are overcome.”

Medicare offers five major tips when it comes to selecting a plan that works:

• Keeping a close eye on prescription drug plans and make sure that its formulary includes prescriptions that said patient is currently taking.
• Check for plans with a low deductible if patients want expenses to be balance throughout the year.
• Look for tiered plans if the patient takes a number of generics.
• If a patient doesn’t have a high number of drug costs but wants coverage to avoid penalties, looking at plans with a low monthly premium.
• If a patient prefers a plan with extra benefits and lower costs available by getting health and prescriptions while willing to pick a plan with restrictions, Part C is recommended.⁴

Balch offered his own thoughts on properly navigating Part D plans.

“It’s hard because several patients focus on premiums because that’s the most obvious and up-front cost,” he said. “But you really have to try and understand the total cost. It’s not just the premium, but it’s the copays, it’s the deductible, and it’s the formularies. If you have medications that you’re already taking, you really need to look at how those medications specifically are treated in the potential plan you’re selecting.”

References

1. A Current Snapshot of the Medicare Part D Prescription Drug Benefit. KFF. October 9, 2024. Accessed November 1, 2024. https://www.kff.org/medicare/issue-brief/a-current-snapshot-of-the-medicare-part-d-prescription-drug-benefit/#:~:text=In%202025%2C%20524%20PDPs%20will,many%20Medicare%20Advantage%20drug%20plans.

2. More Low-Income Subsidy Enrollees Pay Part D Premiums in 2024. Avalere. July 24, 2024. Accessed November 1, 2024. https://avalere.com/insights/more-low-income-subsidy-enrollees-pay-part-d-premiums-in-2024

3. How To Enroll In Medicare: A 2024 Guide. September 3, 2024. Accessed November 1, 2024. https://www.forbes.com/health/medicare/how-to-enroll-in-medicare/

4. 5 tips for choosing Medicare drug coverage. Medicare. Accessed November 1, 2024. https://www.medicare.gov/drug-coverage-part-d/how-to-get-prescription-drug-coverage/5-tips-for-choosing-medicare-drug-coverage