Every year, the Trustees of the Social Security and Medicare trust funds release an annual report on the current and projected status of the two programs. The 2016 report on Medicare was released last week. Here are a few important things in the report:
- Part D rebates continue to increase – We regularly talk about the important role competition plays in Medicare Part D and how robust negotiation occurs between prescription drug plans and drug manufacturers. This year’s report shows rebate levels increased again and have increased each year of the program. And projected rebates in 2015 and beyond are expected to increase significantly.
- Generic utilization rates are also increasing – Since Part D’s implementation 10 years ago and the creation of a marketplace for older Americans to access needed medicines, generic utilization has steadily increased. The Trustees report that in 2015, generic drug utilization in Medicare Part D increased to 86 percent – up from 85 percent in 2014 and 84 percent in 2013.
- An update on the IPAB trigger – You may be familiar with the Independent Payment Advisory Board or IPAB created by the Affordable Care Act. The Board – or the Secretary of Health and Human Services – is tasked with proposing Medicare cuts if spending reaches a certain threshold. While this year’s report pushed off triggering IPAB for another year, it remains a serious threat to seniors and could come between patients and their health care providers.
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