By Pension and Benefits Editorial Staff
The average basic premium for Medicare Part D prescription drug plans, which cover prescription drugs that beneficiaries pick up at a pharmacy, will be $30.50 in 2021. Additionally, beneficiaries will be able to choose a prescription drug plan in their area that offers a broad set of insulins for no more than $35 per month per prescription. According to CMS, the 2021 and 2020 average basic premiums are the second lowest and lowest, respectively, average basic premiums in Part D since 2013. Part D premiums, which have decreased by 12 percent since 2017, have resulted in overall savings of $1.9 billion to beneficiaries during that time frame. Since 2017, Part D enrollment has increased by 16.7 percent.
Part D Savings Model. Earlier this year, CMS introduced the Part D Senior Savings Model allowing Medicare beneficiaries to choose a plan offering insulin access at a maximum $35 copay per month supply. The agency noted that beginning January 1, 2021, beneficiaries who select these plans would save, on average, $446 per year, or 66 percent, on their out-of-pocket costs for insulin. In exchange for these additional benefits, enhanced plans have slightly higher premiums, which are paid for by beneficiaries or through other means, such as a Medicare Advantage plan.
Over 50 percent of beneficiaries are enrolled in enhanced plans. Participating manufacturers will continue to contribute a 70 percent discount on the negotiated price for insulin. CMS views this model as an opportunity for Part D sponsors and manufacturers to partner together to put patients before profits and lower out-of-pocket costs for insulin. With the majority of participating Medicare Advantage plans with prescription drug coverage not charging a Part D premium, beneficiaries who enroll in those plans will not pay any extra premiums.
According to the agency, with about 200 additional standalone prescription drug plans and 1,500 additional Medicare Advantage plans with prescription drug coverage joining the Part D program between 2017 and 2020, the increased number of participants in the market also led to lower costs and lower Medicare premium subsidies, saving taxpayers approximately $8.5 billion over the past four years.
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