CMS Backs Down from Medicare Part D Changes

Seniors-CelebratingSeniors should celebrate the administration’s decision to reverse its proposed restrictions of the Medicare Part D drug benefit plan.

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.

Comments (16)

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  1. Jesse T says:

    It is a good thing that the administration didn’t went through with their plan to reform Medicaid part D. They figured out that it was one of the best government provided programs, has outperformed forecasts and have astonishingly high approval ratings. The administration, who is seeking votes, realizes that an amendment to this program would mean consequences on November.

  2. Wilson R says:

    We shouldn’t cheer just yet. Wait until November perhaps they just delay it until the elections. As citizens we must be aware of those political maneuvers that directly affect the population.

  3. Frank A says:

    Now that seniors are protected, what will the administration will do to protect the young population. High insurance cost, high unemployment, large student loan debts, when will it be time to fix the system for those who are providing the power to make it sustainable in the future?

  4. Tommy S says:

    Wait for it, in the upcoming weeks the CMS will claim that they were able to defend Medicaid part D from the changes that the Republican Party wanted to make to the program. We are entering political season, and in a country in which campaign is based on attacks on the other party, it doesn’t make it hard to predict.

  5. Dennis Byron says:

    While we take a breath for another year, fully expecting that the “seniors are stupid” wing of the Democratic Party will try the same thing next year, let’s not forget who supported President Obama in his latest attack in the War on Seniors:

    – AARP
    – Joe Baker of the so-called Medicare Rights Center
    – Big Y Food Stores
    – Mary Agnes Carey of the so-called non-partisan Kaiser Health News
    – Jack Hoadley of the left-wing Medicare Payment Advisory Commission (MedPAC)
    – Trudy Lieberman, Columbia Journalism Review
    – Edwin Park of the Center on Budget Policy and Priorities
    – PUTTS
    – Ron Pollack, Families USA
    – The Incidental Economist
    – The New York Times editorial board
    – The SCAN Foundation

    • John Fembup says:

      Dennis, I agree. Your list suggests that not all the “seniors are stupid” wing of the Democratic Party are in Congress. It’s a very large wing.

      And by the way, any bird having one wing that much larger than the other could never fly in the real world.

    • Buster says:

      I submit to you that the competition for “the stupid wing of the Democratic Party” is robust!

  6. Micky says:

    It is self evidence that the administration has no reason to make change to the Plan D as it runs pretty well.

  7. Devon Herrick says:

    Some administrators within the Medicare bureaucracy secretly believe that too much choice confuses seniors; and that Medicare could micromanage Medicare Part D drug plans for seniors’ benefit.

    These viewpoints are at odds with the way Medicare Part D plans were envisioned a decade ago when the legislation creating the program was passed. Many advocates at the Dept. of Health and Human Services want to regulate Part D plans to make them efficient; while Republicans want to get the incentives in such a way to make them efficient. Although you could argue the goals are similar, the mindset of how to improve the program couldn’t be farther apart.

  8. LaDonna Edwards says:

    Yes, seniors should celebrate the reversed proposal of restricting Medicare Part D. Medicare Part D serves a huge population of geriatrics that is probably retired. These people depend on this supplemental drug coverage to assist with disease management. Over the years, it seems to have been a huge success in almost 100 % of senior population. This has probably also contribute to our seniors living longer with pharmacological interventions used to manage different medical conditions that arise as they deal with comorbidities. Please continue to support this rejected proposal to allow our parents, grandparents, and great-grandparents live healthier lives at an affordable cost. Medicare Part D is very beneficial in the geriatric population that we as healthcare professionals serve on daily basis. We must advocate for our seniors so that they are knowledgeable about the different benefits or resources they have under Medicaid/Medicare.