Policy experts, providers and others have warned that Part D plans will likely restrict patient access to medicines because of the price setting and other provisions in the IRA.
IRA is already negatively impacting access to medicines in Part D
Medicare Part D provides prescription drug coverage for our nation’s seniors and Americans with disabilities. As a result of Part D, nearly 90% of Medicare beneficiaries have comprehensive drug coverage, amounting to more than 50 million beneficiaries in 2023, and year after year, seniors have reiterated their satisfaction with the program. Unfortunately, price setting measures like in the Inflation Reduction Act (IRA), coupled with structural changes to the program, have put much of what has worked for patients in Part D at risk.
We saw this coming:
While Part D plans are subject to some basic coverage requirements, such as covering at least two medicines per class and covering medicines selected for price setting, they have wide latitude beyond that to impose significant access barriers. Policy experts, providers and others have warned that Part D plans will likely restrict patient access to medicines because of the price setting and other provisions in the IRA. This could happen by:
Even CMS noted, “Part D sponsors may be incentivized in certain circumstances to disadvantage selected drugs by placing selected drugs on less favorable tiers compared to non-selected drugs, or by applying utilization management that is not based on medical appropriateness to steer Part D beneficiaries away from selected drugs in favor of non-selected drugs.” Further, recent research suggests it might be more difficult for non-selected medicines to be placed on preferred formulary tiers without accompanying significant levels of rebating, which could lead to a general narrowing of Part D formularies.
The reality is here:
Seniors are facing more access barriers, including higher premiums and fewer plan options, because of the IRA.
Part D has historically provided seniors and people with a disability with a variety of plans to choose from, ranging from 24 to 32 options in each state. In 2024, the number of standalone Part D plans dropped by 11%, falling to the lowest number of plans available since the Part D program’s beginning in 2006. Fewer plan options and restricted access to medicines through plans means seniors might not be able to find a plan that covers all of their medicines and meets their needs.
Part D also offers special low-income plans through its Extra Help program, but there are now even fewer low-income subsidy benchmark plans available today because of the changes the IRA. Again, this means low-income seniors will have few options to choose from and may have trouble finding a plan that meets their needs. And on top of the fact that there are fewer plans to choose from, over 8 million enrollees could see an increase of more than 25% in their premium this year.
In 2025 and beyond, Part D plans are widely expected to continue to impose unreasonable restrictions, putting patient access to medicines at risk. Policymakers must act to correct these and other serious flaws in the IRA, through strengthened policy protections and strong oversight and monitoring of the program. In addition, Congress needs finish the job of fixing the problems left unaddressed in the IRA, including insurer and PBM practices that drive up out-of-pocket costs.
