A new payment model aims to save Medicare beneficiaries money on insulin purchases.
The Centers for Medicare and Medicaid Services (CMS) introduced the Part D Senior Savings Model on March 11, 2020. The voluntary model will allow participating enhanced Medicare Part D prescription drug plans to cap the out-of-pocket costs for a 30-day supply of insulin at a $35 copay.1
Those savings amount to $466 per year for a single Medicare Part D beneficiary, or 66 percent of the average annual copay costs for insulin.
The current cost projections assume $250 million in savings for the federal government over five years.
Further savings could be possible if the out-of-pocket spending cap causes diabetic beneficiaries to avoid health complications they might have potentially experienced as a result of not taking the proper amounts of insulin due to personal costs.
The new Part D payment model will ensure beneficiaries in participating Medicare prescription drug plans pay a predictable copay for rapid-acting, short-acting, intermediate-acting and long-acting insulins that are made available by participating manufacturers.
The spending limit will be enacted at the beginning of the plan year and last throughout the Part D “donut hole” coverage gap.
The new payment model will target Part D plans that offer more generous prescription drug coverage. These “enhanced plans” are able to further reduce copay amounts in exchange for charging increased premiums.
In 2020, the average premium for an enhanced Part D plan was $49 per month, compared to $32 per month for a basic (non-enhanced) plan. Around 80 percent of Part D plans are enhanced plans, and members of these plans account for 54 percent of all Part D beneficiaries.1
The model is set to take effect January 1, 2021. Insulin manufacturers have until March 18, 2020, to declare participation in the model. Providers of Part D plans have until May 1, 2020.
“The Part D Senior Savings Model provides an innovative market-driven approach that removes barriers to lower insulin costs. We call on health insurance plans and prescription drug manufacturers to take action and provide relief for America’s seniors who take insulin,” - CMS Administrator Seema Verma.
Medicare Part D plans are sold by private insurance companies and offer coverage for prescription medication. These plans can be used in conjunction with Original Medicare (Medicare Part A and Part B).
Medicare beneficiaries who want to obtain prescription drug coverage may also be able to consider enrolling in a Medicare Advantage (Medicare Part C) plan that covers prescription drugs, including insulin.
Some Medicare Advantage plans may also provide additional benefits that can help beneficiaries better manage their diabetes.
Learn more about your Medicare plan options by calling to speak with a licensed insurance agent. You can also compare Medicare Advantage plans and Medicare Part D plans online for free, with no obligation to enroll.
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