Key Details About Medicare Half D Enrollment, Premiums, and Value Sharing in 2024

The Medicare Half D program gives an outpatient prescription drug profit to greater than 50 million older adults and other people with long-term disabilities in Medicare who enroll in personal plans, together with stand-alone prescription drug plans (PDPs) to complement conventional Medicare and Medicare Benefit prescription drug plans (MA-PDs) that embrace drug protection and different Medicare-covered advantages. This transient analyzes Medicare Half D enrollment and prices in 2024 and developments over time, primarily based on information from the Facilities for Medicare & Medicaid Providers (CMS).

This evaluation highlights the persevering with development of Medicare Benefit drug plans as a supply of Half D drug protection, with enrollment general concentrated in a handful of huge plan sponsors. Common premiums for drug protection are a lot decrease in MA-PDs than in stand-alone PDPs, primarily as a result of most MA-PD enrollees are in zero-premium plans, which is in flip associated to the power of Medicare Benefit plan sponsors to make use of rebates to purchase down the Half D premium. Median cost-sharing quantities for medicine lined on some formulary tiers are the identical or comparable in PDPs and MA-PDs, however PDP enrollees are extra probably than MA-PD enrollees to face coinsurance for most popular manufacturers and non-preferred medicine, whereas MA-PD enrollees face larger median coinsurance for specialty tier medicine.

These developments in Medicare Half D drug protection and the prices that folks with Medicare pay for drug plans and for his or her prescriptions are price watching as provisions of the Inflation Discount Act to enhance the Half D profit roll out, together with a $35 insulin copay cap and a brand new out-of-pocket drug spending cap (set at $2,000 in 2025). Such adjustments will assist to decrease out-of-pocket prices for Half D enrollees however may additionally make IT tougher for some Half D plan sponsors to supply low-priced protection, significantly sponsors of stand-alone drug plans. This might imply fewer reasonably priced PDP plan selections for Medicare beneficiaries in conventional Medicare and additional tilt Medicare enrollment in direction of Medicare Benefit, which has broader implications for Medicare program spending.

Medicare Benefit drug plans proceed to draw extra enrollees in comparison with stand-alone drug plans

Nicely over half (57%) of Half D enrollees in 2024 are in Medicare Benefit drug plans, persevering with a pattern of accelerating enrollment in Medicare Benefit plans and declining or comparatively static enrollment in stand-alone prescription drug plans (Determine 1).

Low-Revenue Subsidy enrollment is tilted much more in direction of Medicare Benefit drug plans than general Half D enrollment

Two-thirds of LIS enrollees – 9 million out of 13.7 million – are enrolled in Medicare Benefit drug plans in 2024 (Determine 2). Almost 6 million LIS enrollees are in Medicare Benefit Particular Wants Plans (SNPs), practically all of which (95%) are in plans designed particularly for dual-eligible people (Desk 1). On common, LIS enrollees can select from considerably extra MA-PDs than PDPs of their space which have drug premiums under the regional low-income subsidy premium benchmark quantity – 15 MA-PDs versus 3 PDPs – which means they’ll enroll in these plans for zero premium.

The highest 5 companies cowl greater than three-fourths of Half D enrollees in 2024

Half D enrollment is concentrated in a handful of high plan sponsors, with 5 companies protecting 77% of all Half D enrollees in 2024, or 40.1 million out of 53.1 million enrollees (Determine 3). Almost 1 in 4 enrollees (12.4 million) are in Half D plans sponsored by UnitedHealth, together with each stand-alone PDPs and MA-PDs. CVS, Humana, and Centene every have round 15% of the Half D market, with enrollees in each forms of Half D plans.

Enrollment amongst beneficiaries with out low-income subsidies declined in 11 of the 14 nationwide PDPs in 2024

A lot of the nationwide PDPs accessible in 2024 misplaced enrollment amongst beneficiaries with out low-income subsidies (Determine 4). Solely Wellcare Worth Script noticed substantial enrollment features amongst enrollees with out LIS – from 2.6 million to three.7 million – probably resulting from having a median month-to-month premium of lower than $1, considerably decrease than all different nationwide PDPs.

The typical month-to-month premium for Half D protection is almost 5 instances bigger for PDPs than for MA-PDs

On common, PDP enrollees pay considerably extra every month for his or her Half D drug protection than enrollees in Medicare Benefit drug plans. The typical month-to-month PDP premium is $43, practically 5 instances larger than the $9 common month-to-month premium for drug protection in MA-PDs (weighted by enrollment) (Determine 5; Desk 2). (The overall common premium for MA-PDs, together with all Medicare-covered advantages, is $14 monthly in 2024.)

The distinction between common month-to-month premiums for drug protection provided by PDPs and MA-PDs has been rising bigger, with the PDP common rising and the MA-PD common falling. The typical premium for drug protection in MA-PDs is closely weighted by zero-premium plans as a result of MA-PD sponsors can use rebate {dollars} from Medicare funds to decrease or get rid of their Half D premiums. Rebates to Medicare Benefit plans have more than doubled since 2018 and now exceed $2,000 per 12 months per beneficiary.

The $43 weighted common PDP premium, primarily based on present enrollment after the top of the open enrollment season for 2024, is decrease than the estimated $48 month-to-month PDP premium for 2024, which was primarily based on enrollment in June 2023 and didn’t account for plan switching by present enrollees or plan selections by new enrollees through the open enrollment interval. Bearing in mind plan switching and new enrollment into decrease premium plans resulted within the decrease enrollment-weighted common month-to-month premium for 2024. Somewhat than an estimated improve of 21% over the 2023 common premium (from $40 to $48), the precise improve is 5% (from $40 to $43).

Most Medicare Benefit drug plan enrollees pay no premium for his or her drug protection, whereas greater than half of PDP enrollees pay $30 monthly or extra

Three-fourths of MA-PD enrollees with out low-income subsidies pay no month-to-month premium for Half D protection in 2024, whereas greater than half of PDP enrollees with out LIS (56%) pay $30 or extra – together with 1 in 7 PDP enrollees with out the LIS who pay at the very least $100 monthly for his or her Half D plan (Determine 6). For 2024, all Medicare beneficiaries had entry to zero-premium MA-PD plans – 27 on common – whereas only one PDP was accessible for zero premium for non-LIS enrollees in solely 14 out of 34 PDP areas.

PDP enrollees are extra probably than MA-PD enrollees to face coinsurance for most popular manufacturers and non-preferred medicine, whereas MA-PD enrollees face larger median coinsurance for specialty tier medicine

As in earlier years, Half D enrollees face low copayments for generic medicine and better cost-sharing quantities for most popular manufacturers, non-preferred medicine, and specialty medicine, no matter whether or not they’re in PDPs or MA-PDs (Determine 7). Median cost-sharing quantities for medicine lined on some formulary tiers are the identical or comparable in PDPs and MA-PDs, however PDP enrollees are more likely than MA-PD enrollees to pay coinsurance, or a share of a drug’s worth, for most popular manufacturers and non-preferred medicine. Whereas practically all MA-PD enrollees face a median copay of $47 for most popular manufacturers, most PDP enrollees face median coinsurance of twenty-two%; for non-preferred medicine, MA-PD enrollees face a median copay of $100 whereas PDP enrollees face coinsurance of 47%.

Median coinsurance for specialty tier medicine (people who price over $950 in 2024) is larger for MA-PD enrollees than PDP enrollees – 33% vs. 25%. Plans that waive some or all the commonplace deductible – which is the case for many MA-PDs – are permitted to set the specialty tier coinsurance price above 25%.

These cost-sharing quantities apply when beneficiaries fill prescriptions within the preliminary protection part of the Half D profit. As of 2024, by way of a provision within the Inflation Reduction Act, beneficiaries now not face price sharing within the catastrophic protection part of the Half D profit, which interprets to a cap of about $3,300 out of pocket for brand-name medicine. In 2025, Medicare beneficiaries can pay not more than $2,000 out of pocket for pharmaceuticals lined underneath Half D.