As enrollment in Medicare Part D swells, the Medicare Payment Advisory Commission is suggesting a suite of cost-cutting measures, including one that would shift more risk to health plans. Another idea would be to drop coverage of some antidepressants and immunosuppressants.
Those suggestions might not get a warm welcome on Capitol Hill, since they have a history of being panned by advocates, beneficiaries and lawmakers.
With drug prices on the rise and more baby boomers joining Medicare each year, now is the time to find cost-saving measures for the program, Shinobu Suzuki, a principal policy analyst with MedPAC, said at the panel's meeting Thursday.
But a proposal that could affect insurers immediately raised the eyebrows of a health plan executive on the panel.
By law, Medicare Part D subsidizes 74.5% of the expected cost of basic drug benefits, with enrollees paying the remainder through premiums. The subsidy is made up of two components: direct monthly subsidy payments and expected individual reinsurance payments to plans.
MedPAC proposes reducing the reinsurance subsidy from 80% to 20%, while increasing what a plan is paid upfront, and maintaining Medicare's overall 74.5% subsidy of basic benefits.
MedPAC believes this would force plans to more diligently track their spending.
“We certainly want more plan accountability, but is there a risk to [plan] stability,” said Dr. Craig Samitt, a MedPAC commissioner and chief clinical officer at Anthem. He said he was especially worried about how the proposal would affect smaller plans.
Others supported the idea, believing it would increase the use of cheaper generic drugs.
“I am a big fan of the recommendation that plans take on more risk,” said Kathy Buto, a MedPAC commissioner and independent health policy consultant in Arlington, Va. “They will have greater skin in the game.” She added that if generic drugs were used more often, it could reduce the need for reinsurance.
Last year, more than 39 million Medicare beneficiaries were enrolled in Part D, through either a stand-alone prescription drug plan, or through a Medicare Advantage prescription drug plan. That's an increase of nearly 2 million beneficiaries since 2014 and nearly 17 million beneficiaries since 2006, when only 53% of eligible beneficiaries were enrolled in Part D plans, according to the Kaiser Family Foundation. That group now makes up 72% of all eligible Medicare beneficiaries.
Perhaps the most controversial of MedPAC's suggestions was to limit which drugs would be a part of the so-called “protected class” (PDF) of Medicare Part D.
Under the policy, a part D plan is required to cover all or substantially all drugs in six therapeutic classes: antiretrovirals; immunosuppressants when used to prevent organ rejection; antidepressants; antipsychotics; anticonvulsant agents; and antineoplastics.
MedPAC suggested removing antidepressants and immunosuppressants used to prevent transplant rejection from the list. The commission argued that the move would save money without affecting medication access by moving patients to generic options.
But the exact amount saved was unknown.
The CMS has tried twice to make this change through rulemaking, once in 2012 and again in 2014. Stakeholders thwarted both efforts, arguing it would deny patients their medications. Members of both parties in Congress also slammed the idea.
But during Thursday's meeting, panel members seemed supportive of the proposal.
Jack Hoadley, a Georgetown University health policy analyst, did not believe the change would affect beneficiaries' access to drugs, especially in the case of antidepressants, where there are many generic options available.
“Restricting timely access to medicine jeopardizes patient health, puts patients at greater risk for poor clinical outcomes, and increases costs for patients and taxpayers,” Chuck Ingoglia, executive director of the Partnership for Part D Access, a healthcare coalition, and senior vice president for public policy at the National Council for Behavioral Health, said in a statement.
In all, MedPAC presented 10 ideas for panel members to consider. They will vote on a modified or whittled-down list in April.
Should the commission vote to approve any of the Part D proposals during their meeting next month, those proposals will be formally presented to Congress in MedPAC's annual June report.