May 26, 2020
Today, under President Trump’s leadership, the Centers for Medicare & Medicaid Services (CMS) announced that over 1,750 standalone Medicare Part D prescription drug plans and Medicare Advantage plans with prescription drug coverage have applied to offer lower insulin costs through the Part D Senior Savings Model for the 2021 plan year. Across the nation, participating enhanced Part D prescription drug plans will provide Medicare beneficiaries access to a broad set of insulins at a maximum $35 copay for a month’s supply, from the beginning of the year through the Part D coverage gap.
Currently, Part D sponsors may offer prescription drug plans that provide lower cost-sharing in the coverage gap; however, when they do, the Part D sponsor accrues costs that pharmaceutical manufacturers would normally pay. These costs are then passed on to beneficiaries in the form of higher premiums. The new insulin model directly addresses this disincentive by doing two things: 1) allowing manufacturers to continue paying their full coverage gap discount for their products, even when a plan offers lower cost-sharing; and 2) requiring participating Part D sponsors’ plans, in part through applying manufacturer rebates, to lowering cost-sharing to no more than $35 for a month’s supply for a broad set of insulins.
Under President Trump’s leadership, for the first time, CMS is enabling and encouraging Part D plans to offer fixed, predictable copays for beneficiaries rather than leaving seniors paying 25 percent of the drug’s cost in the coverage gap. Both manufacturers and Part D sponsors responded to this market-based solution in force and seniors that use insulin will reap the benefits.
Based on CMS’s estimates, beneficiaries who use insulin and join a plan participating in the model could see average out-of-pocket savings of $446, or 66 percent, for their insulins, funded in part by manufacturers paying an estimated additional $250 million of discounts over the five years of the model. With a robust voluntary response from Part D sponsors, CMS anticipates beneficiaries will have Part D plan options in all 50 states, the District of Columbia, and Puerto Rico, through either a standalone prescription drug plan (PDP) or a Medicare Advantage plan with prescription drug coverage. Beneficiaries will be able to enroll during Medicare open enrollment, which is from October 15, 2020 through December 7, 2020, for Part D coverage that begins on January 1, 2021.
The Part D Senior Savings Model – which was announced on March 11, 2020 – is a voluntary model that tests the impact on insulin access and care by participating Part D enhanced alternative plans offering lower out-of-pocket costs, at a maximum $35 copay for a month’s supply, for a broad range of insulins. Part D sponsors that participate in the model will offer beneficiaries Part D prescription drug plans that provide supplemental benefits for a broad range of insulins, including both pen and vial dosage forms for rapid-acting, short-acting, intermediate-acting, and long-acting insulins. Participating pharmaceutical manufacturers will continue to pay their current 70 percent discount in the coverage gap for their insulins that are included in the model, and based on the model’s waiver of current regulations, those manufacturer discount payments will be calculated before the application of supplemental benefits under the model – which will reduce the out-of-pocket cost of insulin for Medicare beneficiaries.
Part D sponsors that applied must submit their calendar year 2021 plan benefits to CMS by June 1, 2020 to designate their participation in the model. CMS anticipates releasing the premiums and costs for specific Medicare health and drug plans for the 2021 calendar year in September 2020, including final information on the model.
More information can be found on the Part D Senior Savings Model web page.
Centers for Medicare & Medicaid Services (CMS) has sent this Center for Medicare and Medicaid Innovation (CMMI) Update. To contact Centers for Medicare & Medicaid Services (CMS) go to our contact us page.