What is Medicare Part D?
Medicare Part D is a voluntary outpatient prescription drug benefit for people on Medicare that went into effect in 2006. All 59 million people on Medicare, including those ages 65 and older and those under age 65 with permanent disabilities, have access to the Part D drug benefit through private plans approved by the federal government; more than 42 million Medicare beneficiaries are currently enrolled in Medicare Part D plans. The design of the benefit includes a deductible ($415 in 2019), an initial coverage limit, followed by a coverage gap, and then catastrophic coverage. The coverage gap begins after total drug costs (the amount paid by the individual and the plan, combined) reach $3,820. In 2019, once a person enters the coverage gap, they pay 25% of the plan’s cost for brand-name drugs and 37% of the plan’s cost for generic drugs until they reach the end of the coverage gap –$5,100 in 2019. Once an individual has met the out-of-pocket cost requirements (or “catastrophic threshold”), they automatically get “catastrophic coverage.” With catastrophic coverage, an individual only pays a reduced coinsurance amount for drugs for the rest of the year.
Each year, the qualifying threshold for catastrophic coverage increases, but in 2010, Congress enacted provisions to slow the rate of increase and keep costs from rising too fast. This affordability measure is now at risk, as these provisions are set to expire at the end of 2019.
What Will Happen if These Affordability Provisions Expire?
If we let the Medicare Part D provisions expire in 2019, personal costs will increase significantly for many Medicare beneficiaries. In fact, the catastrophic threshold will grow from $5,100 in 2019 to $6,350 in 2020 – an increase of more than $1,200 in out-of-pocket prescription drugs before they qualify for catastrophic coverage. This spike in out-of-pocket spending requirements is being referred to as the “Medicare Cliff.”
Who Does This Harm?
Some of our most vulnerable citizens will be heavily affected by this Medicare Cliff. Senior citizens, Americans with disabilities, and other vulnerable populations are especially at risk. We must get Congress to act now and pass legislation to prevent the spike in of out-of-pocket spending requirements in Part D, to protect our elderly, disabled, and most at-need citizens.
What Can We Do?
Ready for Cures is dedicated to improving access to life-saving medicines and fostering a public policy environment that supports healthcare innovation. Our community is committed to ensuring Medicare patients have access to the medications they need. We must get Congress to pass legislation to prevent the spike in of out-of-pocket spending requirements in Part D. Join our efforts by sending a message to Congress today.