March 16, 2022

Medicare Part B Drugs: Cost Implications for Beneficiaries in Traditional Medicare and Medicare Advantage – Kaiser Family Foundation

Filling the need for trusted information on national health issues
Filling the need for trusted information on national health issues
Juliette Cubanski Follow @jcubanski on Twitter , Nolan Sroczynski , and Tricia Neuman Follow @tricia_neuman on Twitter
Published: Mar 15, 2022
In the face of rising prescription drug costs, a large majority of the public supports federal efforts to lower drug spending. In his 2022 State of the Union address, President Biden urged Congress to pass legislation to rein in drug costs. In November 2021, the House of Representatives passed the Build Back Better Act (BBBA), which includes several provisions that would lower prescription drug costs, but the Senate has yet to take action on this legislation. Proposals included in the BBBA would allow the federal government to negotiate the price of some drugs covered under Medicare Part B (drugs administered by physicians and other health care providers) and Part D (retail prescription drugs); require drug companies to pay rebates to the federal government when annual increases in drug prices for Medicare and private insurance exceed the rate of inflation; cap monthly insulin costs for people with Medicare and private insurance; and cap Medicare beneficiaries’ out-of-pocket drug spending under Part D (but not Part B).
To better understand the potential out-of-pocket cost exposure that Medicare beneficiaries may face for Part B drugs, in this brief we analyze cost-sharing liability for these drugs in traditional Medicare and cost-sharing requirements in Medicare Advantage plans. Data limitations preclude us from analyzing actual out-of-pocket costs paid by beneficiaries who used Part B drugs. For traditional Medicare beneficiaries, claims data do not report separately cost-sharing liability paid directly by beneficiaries versus supplemental insurance (where applicable). For Medicare Advantage enrollees, there are no data available on actual out-of-pocket costs paid for Part B drugs.
Beneficiaries in traditional Medicare are charged 20% of the cost of Part B drugs, with no annual limit on their out-of-pocket costs. Beneficiaries enrolled in Medicare Advantage plans – which account for a growing share of the Medicare population and currently cover close to half of all beneficiaries – also typically face cost-sharing requirements for Part B drugs up to their plan’s out-of-pocket limit ($7,550 for in-network cost sharing and $11,300 for in-network and out-of-network cost sharing combined in 2022). Most but not all beneficiaries in traditional Medicare have some form of supplemental coverage to help with their Medicare cost-sharing requirements, while most Medicare Advantage enrollees do not. For example, most traditional beneficiaries who have Medigap have a policy that covers the 20% coinsurance for Part B drugs and services, while Medicaid and some of the Medicare Savings Programs cover Medicare cost sharing for eligible low-income beneficiaries in both traditional Medicare and Medicare Advantage. But even those with supplemental insurance may face some out-of-pocket costs for their Part B drugs, depending on the generosity of their coverage. In addition, roughly 6 million Medicare beneficiaries have no supplemental coverage and would be responsible for the full 20% coinsurance.
In the first part of this analysis, we examine Medicare claims data for 2019 to assess cost-sharing liability for Part B drugs for beneficiaries in traditional Medicare (excluding Part B vaccines since these are provided at no cost to Medicare beneficiaries). In the second part of our analysis, we use Medicare Advantage benefit design data for 2022 to examine the range in cost-sharing amounts at or below 20% coinsurance charged by Medicare Advantage plans for in-network Part B drugs. We also analyze variation in cost-sharing amounts for out-of-network Part B drugs charged by plans that provide out-of-network coverage. (See Methods for additional details on both parts of our analysis.)
Of the 4.1 million beneficiaries in traditional Medicare who received one or more Medicare Part B drugs included in this analysis, 1 in 4 (1.0 million beneficiaries) faced cost-sharing liability of at least $1,000 and nearly 1 in 5 (0.7 million) faced cost-sharing liability of at least $2,000 in 2019 (Figure 1). About 0.4 million traditional Medicare beneficiaries – or 1 in 10 of those who used Part B drugs – had at least $5,000 in cost-sharing liability for these drugs in 2019. As previously noted, we are unable to analyze how many beneficiaries had supplemental insurance to cover some or all of these costs and how many were responsible for paying the full amount out-of-pocket.

window.addEventListener(‘message’, function(event) {
if (typeof event.data[‘datawrapper-height’] !== ‘undefined’) {
var iframes = document.querySelectorAll(‘iframe’);
for (var chartId in event.data[‘datawrapper-height’]) {
for (var i=0; i<iframes.length; i++) {
if (iframes[i].contentWindow === event.source) {
iframes[i].style.height = event.data['datawrapper-height'][chartId] + 'px';
}
}
}
}
});

Unlike traditional Medicare, Medicare Advantage plans have an out-of-pocket limit, but Medicare Advantage enrollees can still face substantial cost-sharing amounts for some of the higher-priced Part B drugs, especially if administered out-of-network.
Beneficiaries in both traditional Medicare and Medicare Advantage can be exposed to potentially high out-of-pocket costs for Part B drugs – though data limitations preclude us from analyzing out-of-pocket costs paid directly by beneficiaries who used Part B drugs in either traditional Medicare or Medicare Advantage plans and the share of costs covered by private supplemental insurance or Medicaid. We find that, overall, 1 in 4 beneficiaries in traditional Medicare who used Part B drugs in 2019 faced cost-sharing liability of at least $1,000, and more than half of Part B drugs included in this analysis had average cost-sharing liability of $1,000 or more. Given the absence of an out-of-pocket limit for beneficiaries in traditional Medicare, the costs of chemotherapy and other Part B drugs could represent a substantial financial burden for beneficiaries with no supplemental coverage, or with supplemental coverage that does not cover all cost-sharing requirements for these drugs.
While Medicare Advantage plans are required to have a maximum out-of-pocket limit and can charge no more than 20% for Part B drugs administered by an in-network provider, most Medicare Advantage enrollees would face higher costs for Part B drugs furnished by an out-of-network provider, including close to 4 million enrollees in plans with out-of-network coverage and nearly 15 million enrollees in HMOs and other plans with no out-of-network coverage. Plans with out-of-network coverage typically charge higher cost sharing for Part B drugs and other services received out-of-network to encourage enrollees to receive care from in-network providers where plans have negotiated lower prices. These network arrangements and cost-sharing differences can have potentially large cost implications for Medicare beneficiaries.
Among the set of proposals that policymakers have recently considered to lower prescription drug costs, allowing the federal government to negotiate prices for some drugs covered under Part B and Part D and requiring inflation rebates for Medicare-covered drugs to limit annual increases in drug prices could help to address the spending burden that Medicare beneficiaries could face if they need high-cost drugs, whether covered under Part B or Part D.

We calculate beneficiary liability using variables in the claims data corresponding to deductible and coinsurance amounts, but we are not able to determine the amount that a beneficiary actually paid. Beneficiaries may not be responsible for some or all of their cost-sharing liability if they have certain types of supplemental coverage, including most Medigap policies or full benefits through Medicaid.
Medicare Advantage cost-sharing amounts and plan designs are based on the Centers for Medicare & Medicaid Services (CMS) Medicare Plan Finder data for 2022 and 2022 PBP Benefits file. Enrollment numbers are from the CMS January 2022 enrollment files. Plan-county enrollment and plan totals were removed if fewer than 11 beneficiaries were enrolled. Additionally, all employer plans were removed from the analysis as they are not required to submit all the data necessary for this analysis. We also excluded all Medicare-Medicaid plans.
For out-of-network Part B drugs in PPOs, data limitations preclude us from assessing differences in out-of-network cost-sharing amounts for chemotherapy and other Part B drugs because the Medicare Plan Finder does not separate out-of-network cost sharing for these two categories. It is likely that the percentage of enrollees we report as having a mixed cost-sharing structure for out-of-network Part B drugs would be lower if the data allowed us to analyze out-of-network cost sharing separately for chemotherapy and other Part B drugs. For an analogous approach, we estimated combined in-network cost-sharing amounts based on the amounts for chemotherapy and other Part B drugs. If these cost-sharing amounts were analyzed separately, the percentage of enrollees paying 20% coinsurance would be higher for chemotherapy, with a lower percentage of enrollees exposed to a mixed cost-sharing design. The percentages for the separate category of other Part B drugs would be similar to the percentages we report for both chemotherapy and other Part B drugs combined.

source

DRUG(s).WATCH

Medicare Part B Drugs: Cost Implications for Beneficiaries in Traditional Medicare and Medicare Advantage – Kaiser Family Foundation

Related

About The Author

admin

Add a Comment

Related

Related Posts

About The Author

admin

Add a Comment