Recent Changes to Part D

The Inflation Reduction Act (IRA) made the most substantial changes to Part D since the program was created. The law took important steps to improve the Part D program, and lower out-of-pocket costs for beneficiaries in Part D. These include setting an annual cap on what seniors pay for their medicines and allowing seniors to spread out their out-of-pocket costs throughout the year to make the costs more predictable starting in 2025. The law also requires Part D plans to limit cost-sharing for covered insulins to $35 and to offer zero cost sharing for certain Part D vaccines.

However, the IRA also includes price setting provisions that undermine this important program and may reduce access to medicines for seniors and people with disabilities. For instance:

  • Part D insurance plans are required to cover medicines that are selected for price setting, but the IRA does not prohibit plans from imposing utilization management to restrict access. 
  • Insurers can move Part D medicines to more expensive, non-preferred and specialty formulary tiers that have higher out-of-pocket costs. 
  • Part D plans may stop covering some medicines altogether because they are only required to cover a minimum of two medicines in most therapeutic classes.


Areas for Improving Part D

While the IRA made important updates to the Part D benefit, the law failed to rein in the insurers and PBMs administering Part D plans who are leaving patients with higher costs and less access to medicines.

Insurers and PBMs that administer Part D plans negotiate significant rebates and discounts, which lowered total gross Part D expenditures by 23% in 2021, according to MedPAC. Despite this, 92% of seniors’ out-of-pocket spending on brand medicines is based on the undiscounted list price. And 9 out of 10 seniors taking a brand medicine are exposed to the full price through deductibles and coinsurance – even when their insurer and their PBM are paying far less. As a result, many seniors end up paying more for their medicines than their insurance plan. 
If insurers don’t pay full price for medicines, seniors shouldn’t either. Sharing the savings with seniors at the pharmacy would deliver immediate relief to millions of Medicare beneficiaries. Congress should require Part D insurers to share the same price they pay for medicines with seniors and base seniors’ cost-sharing requirement on the net price insurers pay.

This website uses cookies and other tracking technologies to optimize performance, preferences, usage, and statistics. By clicking “Accept All”, you consent to store on your device the cookies and other tracking technologies that require consent. You can tailor or change your preferences by clicking “Manage My Cookies”. You can check our privacy policy for more information.