The health care policy intelligentsia has started to catch on the the idea that the Part D benefit redesign has the potential to extinguish the stand-alone Part D plan that has been a favorite of Medicare beneficiaries enrolled in Part A and B, often with a supplemental plan attached. The Part D benefit design that was part of the Inflation Reduction Act increases the liability of plan sponsors for enrollees in the catastrophic phase. Currently, the federal government picks up most of the costs associated with high cost drugs fir chronic conditions.
Currently, plans have incentives to push enrollees along to the catastrophic phase as quickly as possible. That all ends in 2024 and plan sponsors will need to find ways to control the drug spend. The best way to do that is through a medical benefit. As we approach open enrollment, expect marketing and outreach to focus on any and all incentives to encourage enrollment in Medicare Advantage Part C and D plans.
All that is fine for the MCOs as they increase enrollment in their highest margin business. But what will the politicians say? Sen. Bernie Sanders has been vehemently opposed to what he sees as "privatization" of a government program. The Part D redesign has the potential to dramatically reduce the Part A/B, or traditional Medicare Fee-for-Service enrollment.
In politics we refer to this situation as an "unintended consequence."
Emily Evans
Managing Director – Health Policy
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