Three times per week, Tod Gervich injects himself with Copaxone, a prescription drug that can lessen the frequency of relapses in those who have some forms of multiple sclerosis. After a lot more than Two decades using the disease, Gervich, 66, is accustomed to managing his condition. What he can't get used to is when Medicare's coinsurance charges drain his wallet.
Unlike commercial plans that cap members' out-of-pocket drug spending annually, Medicare has no limit for prescription drugs in Part D, its drug benefit. Using the price of specialty drugs increasing, some Medicare beneficiaries could owe 1000s of dollars in out-of-pocket drug costs every year for any single drug.
Recent proposals through the Trump administration and Sen. Ron Wyden (D-Ore.) would address the long-standing problem by imposing a spending cap. But it is unclear whether any of these proposals will obtain a foothold.
The 2006 introduction from the Medicare prescription medication benefit would be a boon for seniors, however the coverage had weak spots. One was the so-called doughnut hole – the gap beneficiaries fell into once they accumulated several thousand dollars in drug expenses and were responsible for the full price of their medications. Another was the possible lack of an annual cap on drug spending.
Legislative changes have gradually closed the doughnut hole to ensure that, this season, beneficiaries no longer face a coverage gap. Inside a standard Medicare drug plan, beneficiaries pay A quarter of the price of their brand-name drugs until they reach $5,100 in out-of-pocket costs. Once patients reach that threshold, the catastrophic part of their coverage takes over and their obligation drops to five percent. However it never disappears.
It's that ongoing Five percent that hits hard for people, like Gervich, taking expensive medications.
His 40-milligram dose of Copaxone costs about $75,000 annually, based on the National Ms Society. In January, Gervich paid $1,800 for the drug and the other $900 in February. Discounts that drug manufacturers are required to provide to Part D enrollees also counted toward his out-of-pocket costs. (More on that later.) By March, he hit the $5,100 threshold that pushed him into catastrophic coverage. For the rest of the year, he'll owe $295 a month for this drug, before the cycle starts once again in January.
That $295 is a far cry in the approximately $6,250 monthly Copaxone price without insurance. But, combined with the $2,700 he already paid before his catastrophic coverage kicked in, the additional $2,950 he'll owe this year isn't any bit. Which assumes he needs not one other medications.
“I feel like I'm being punished financially for having a chronic disease,” he said. He's considered discontinuing Copaxone to save money.
His drug bill is a reason Gervich has decided not to retire yet, he said.
An annual cap on his out-of-pocket costs “would definitely help,” said Gervich, a self-employed certified financial planner in Mashpee, Mass.
Drugs like Copaxone that can modify the effects of the condition have been on a high upward price trajectory recently, said Bari Talente, executive v . p . for advocacy in the National Ms Society. Drugs that used to cost $60,000 annually 5 years ago cost $90,000 now, she said. With those totals, Medicare beneficiaries “are going to hit catastrophic coverage regardless of what.”
Specialty-tier drugs for multiple sclerosis, cancer and other conditions – based on Medicare as those that cost more than $670 a month – account for a lot more than 20 % of total spending partly D plans, up from about 6 percent before 2010, based on a report through the Medicare Payment Advisory Commission, a nonpartisan agency that advises Congress about the program.
Just over 1 million Medicare beneficiaries in Part D plans who didn't receive low-income subsidies had drug costs that pushed them into catastrophic coverage in 2021, a lot more than twice as many because the 2007 total, an analysis through the Kaiser Family Foundation found. (KHN is definitely an editorially independent program of the foundation.)
“When the drug benefit was made, 5 percent probably didn't appear to be that big a deal,” said Juliette Cubanski, associate director of the Program on Medicare Policy at the Kaiser Family Foundation. “Now we have such expensive medications, and many of them are covered under Part D – where, before, many expensive drugs were cancer drugs” that were administered in doctors' offices and included in other parts of Medicare.
The lack of a spending limit for the Medicare drug benefit sets it apart from other coverage. Underneath the Affordable Care Act, the most someone generally owes out-of-pocket for covered drugs along with other medical care for this year is $7,900. Plans typically pay 100 % of customers' costs after that.
The Medicare program doesn't have an out-of-pocket spending limit for Part A or Part B, which cover hospital and outpatient services, respectively. But beneficiaries can purchase supplemental Medigap plans, most of which pay coinsurance amounts and hang out-of-pocket spending limits. Medigap plans, however, don't cover Part D prescription plans.
Counterbalancing the administration's proposal to impose a spending cap on prescription medications is yet another that may increase many beneficiaries' out-of-pocket drug costs.
Currently, brand-name drugs that enrollees receive are discounted by 70 % by manufacturers when Medicare beneficiaries have accumulated a minimum of $3,820 in drug costs and until they reach $5,100 in out-of-pocket costs. Those discounts are applied toward beneficiaries' total out-of-pocket costs, moving them more quickly toward catastrophic coverage. Under the administration's proposal, manufacturer discounts would no longer be treated this way. The administration said this could help steer patients toward more affordable generic medications.
Still, beneficiaries would need to pay more out-of-pocket to achieve the catastrophic spending threshold. Thus, fewer people may likely get to the catastrophic coverage level where they could benefit from a spending cap.
“Our problem is that many people will be paying more out-of-pocket to get at the $5,100 threshold and also the drug cap,” said Keysha Brooks-Coley, v . p . of federal affairs at the American Cancer Society Cancer Action Network.
“It's a mixed bag,” said Cubanski of the proposed calculation change. “There is going to be savings for many individuals” who get to the catastrophic phase of coverage. “But for a lot of you will see higher costs.”
For many people, especially cancer patients taking chemotherapy pills, the possible lack of a drug-spending cap in Part D coverage seems especially unjust.
These cutting-edge targeted oral chemotherapy along with other drugs tend to be expensive, and Medicare beneficiaries often hit the catastrophic threshold quickly, said Brooks-Coley.
Patty Armstrong-Bolle, who resides in Haslett, Mich., takes Ibrance, a pill, daily to help keep under control the cancer of the breast which has spread with other parts of her body. But as the medicine helps send her cancer into remission, she may not be free of an economic obligation for the pricey drug.
Armstrong-Bolle, 68, paid $2,200 in January and February for that drug this past year. When she entered the catastrophic coverage part of her Part D plan, the cost dropped to $584 monthly. Armstrong-Bolle's husband died this past year, and she used the cash from his life insurance policy to cover her drug bills. This season, a patient assistance program has covered the first few months of coinsurance. That money will run out next month and she'll owe her $584 portion again.
If she were getting traditional drug infusions instead of taking an oral medication, her treatment could be covered under Medicare part b from the program and her coinsurance payments could be covered.
“It just doesn't seem fair,” she said.