By expanding coverage for Medicare beneficiaries, Part D has increased access to needed medicines and led to an improvement in patient adherence to their treatments. When seniors are more adherent to the medicines that treat their conditions, that can result in fewer doctor’s visits and less or shorter hospitalizations – all of which not only improves patient health but also helps keep costs down in the overall health care system.
Additionally, Medicare Part D beneficiaries have enjoyed low and stable average monthly premiums since the program began, from an average monthly premium of $23 in 2006 to $32.74 in 2019. And overall Part D program costs are actually lower than initially predicted by 45%, coming in at nearly $350 billion less than the Congressional Budget Office’s initial 10-year estimate.
The Part D program is unique in that its market-based structure of private-sector competition and robust negotiation has struck the balance between promoting access and controlling costs. Medicare Part D plans compete to deliver affordable coverage for beneficiaries while also providing value for taxpayers. To do so, private plans competitively bid each year, attracting beneficiaries through low premiums and quality coverage. This structure also allows beneficiaries to choose a plan that best meets their individual coverage and financial needs.
While nearly 9 in 10 beneficiaries remain satisfied with Medicare Part D, the program could work even better and be made fairer by improving affordability and predictability for beneficiaries who are increasingly facing higher out-of-pocket costs.
Improvements to Medicare Part D must be done the right way with targeted and measured reforms that protect beneficiaries from catastrophic costs, pass along rebate savings directly to patients at the pharmacy counter and make beneficiaries’ costs more predictable. Doing so could lower out-of-pocket costs for millions of beneficiaries, generate savings for the federal government and strengthen the already successful Part D program.