Avalere: Rising coinsurance means less certainty on cost for Medicare PDP beneficiaries

WASHINGTON — Medicare Part D plan (PDP) beneficiaries might be paying more out of pocket for a majority of their prescription medication, according to a new analysis from Avalere Health. The company found that a majority — 58% of covered drugs among PDPs — of medications are subject to coinsurance rather than copayments for beneficiaries. In 2014, only about 35% of covered drugs were subject to coinsurance. 

 

“As coinsurance becomes more common in Part D plans, consumers will find their drug costs are less predictable and will need to rely more on tools like the Medicare Plan Finder to help estimate out-of-pocket costs,” Avalere Health senior manager Colin Shannon said. 

 

When it comes to the formulary tiers under which certain drugs are classified, about 96% of beneficiaries are in a PDP that has more than one tier requiring coinsurance — a rise from the 39% in that group in 2014. 

 

“These very high rates of coinsurance have shifted our understanding of Part D formulary coverage,” said Caroline Pearson, senior vice president at Avalere. “It will be important to monitor what drugs are being placed on various coinsurance tiers and how plans are using these tiers to manage cost and utilization in the program.”

 

Avalere Health also found that Medicare Advantage plans use coinsurance less frequently than standalone PDPs, charging coinsurance for a little more than a quarter of covered drugs, largely specialty.