Avalere Health: Medicare proposed rule change could require 39% of all PDPs to be eliminated in 2016

WASHINGTON — A Medicare proposed rule change limiting the number of prescription drug plans that insurers may offer in the Part D market could require 39% of all enhanced plans to be eliminated in 2016, according to an analysis from Avalere Health that was released Wednesday. The change, which limits standalone PDP sponsors to one basic and one enhanced plan per region, was proposed by the Centers for Medicare and Medicaid Services in a January proposed regulation. 

Avalere estimates that the change would require 214 of the current 552 enhanced PDPs to be terminated or consolidated with an existing plan. Those 214 plans represent products sold by nine carriers that currently offer two enhanced PDPs in the same region.

“Many health plans have designed low-premium, enhanced PDPs to attract cost-conscious enrollees and more comprehensive options for higher-need beneficiaries,” said Matt Eyles, EVP at Avalere Heath. “Plans are likely to respond to this change by rolling the more comprehensive PDP into the lower-cost plan, which could increase premiums for beneficiaries.”

The anticipated change in policy would impact 7.4 million of the 7.9 million (94%) Medicare beneficiaries who are currently enrolled in an enhanced plan — including both beneficiaries whose plan will be terminated or consolidated and those whose plan will remain but may see changes in benefits or premiums as plan options and enrollees are consolidated.