Medicare Part D — which offers prescription drug coverage administered by private health insurers — has changed considerably since its launch in 2006, according to a Kaiser Family Foundation report.
Private marketplace changes and program regulations alike have influenced Part D since its enactment. Here are five notable trends in the Medicare prescription drug coverage arena, according to the report.
1. Medicare drug plan enrollment has exceeded 37 million this year, up 2 million from 2013 and 15 million from 2006. Sixty-two percent of those enrollees are covered by stand-alone prescription drug plans, although Medicare Advantage prescription drug plans are increasingly popular, representing half of the increase in enrollment from 2013 to 2014.
2. Three health insurers — UnitedHealth Group, Humana and CVS Caremark — dominate the Part D market, accounting for half of all Part D enrollees this year. UnitedHealth has the greatest market share, covering more than one in five Part D beneficiaries this year.
3. Between 2006 and this year, cost-sharing for brands has gone up by roughly 50 percent for beneficiaries enrolled in stand-alone drug plans and 70 percent for Medicare Advantage drug plan enrollees. Medicare Advantage plan beneficiaries typically have higher cost-sharing than those with stand-alone plans: Median cost sharing for preferred and non-preferred brands in Medicare Advantage plans is $45 and $95, compared with $40 and $85 for stand-alone plans.
4. Preferred pharmacy networks are increasingly prevalent. The portion of Part D stand-alone drug plans with this type of network went from 7 percent in 2011 to 72 percent in 2014. The report states, "Enrollees in these plans pay lower cost sharing if they use preferred pharmacies and higher cost-sharing if they use a non-preferred pharmacy. In some plans, however, there is no preferred pharmacy within a reasonable travel distance, which could make it difficult for enrollees in these plans to take advantage of this lower cost sharing."
5. Most stand-alone Part D enrollees are in plans with the highest quality ratings. In fact, only 5 percent of enrollees are covered by plans with at least 3.5 out of five stars, and almost one-fourth are enrolled in plans with fewer than three stars.