By virtually all measures, Medicare Part D has been a great success. Seniors’ satisfaction rates average about 90 percent to 95 percent.
In January, the Centers for Medicare and Medicaid Services (CMS) announced plans to change how Medicare Part D plans are regulated. To save money, CMS wanted to block seniors’ access to drug plans that offer lower premiums (and lower copays) in return for patronizing a preferred pharmacy network. The changes would also have limited seniors’ access to certain medications.
After criticism launched from many fronts, including the NCPA, CMS this week announced it had backed away from its earlier recommendations to micromanage Medicare Part D drug plans.
Under Medicare Part D plans, premiums have remained affordable because drug spending per member has been far lower than projected:
Nearly a decade ago the Medicare Trustees projected a per capita benefits cost of $1,971 in 2006, rising to $3,047 by 2013.
- But the actual per capita cost in 2013 was only $1,846 — a savings per enrollee of nearly 40 percent.
- Back in 2006, the Social Security and Medicare Trustees projected the program would cost about $127 billion by 2013. Yet the cost in 2013 was only about $72 billion.
The Medicare drug program is administered by private drug plans, which vigorously compete for seniors’ patronage. Seniors seem to appreciate lower priced preferred pharmacy networks. Indeed, an estimated 14 million seniors in Part D stand-alone plans (meaning, they are not integrated with a Medicare Advantage health plan) are enrolled in a drug plan that features a preferred pharmacy network. Now that CMS has decided against changes to the Medicare Part D program, 14 million seniors are free to keep the plan they have.