Mutual of Omaha Rx’s mission is to empower our customers to improve their health by providing affordable, safe, and dependable prescription drug coverage through innovation and collaboration with trusted organizations.
The recently passed Inflation Reduction Act (IRA) makes some key changes to PDP with the goal of keeping member costs low. These changes are phased in over the next several years, and they will start impacting members in 2023. The following are the biggest changes that will impact members. All of this is of course dependent on no additional regulatory changes—so I’ll add, as a caveat, “Never say never!”
Insulins—After a few years of the optional Part D Senior Savings Model, starting in 2023 all plans will cap member cost sharing for insulins at $35 for a one month supply.
Vaccines—Members will no longer have any cost sharing for vaccines. This includes the important shingles vaccine.
Member out of pocket spend—The current Part D structure has benefit phases that determine what a member pays. When members reach the catastrophic phase, their cost share generally drops to a five percent coinsurance.
This out of pocket for the catastrophic phase will be removed over the next few years. First, in 2024 the benefit phases will still be in place, but the member cost share in the catastrophic phase will be eliminated, meaning members will not have to pay out of pocket to fill drugs if they get into the catastrophic phase.
Then, in 2025, there will be a deeper Part D redesign with changes to the phasing and a proper maximum out of pocket amount.
PDP premium stabilization—Affordability is key to the Part D space, and there is a provision that limits the premium increase plans can take year over year starting in 2024. The mechanics are a bit complex, but this should be a levelizing force that keeps PDP a compelling and affordable product for members.
Drug negotiation—Beginning in 2026, the Federal government will begin negotiating drug prices with drug manufacturers. The list of drugs to be negotiated grows each year and eventually will include Part B and Part D drugs, meaning costs should be reduced in original Medicare as well as Part D.
Takeaway—This year, as you’re helping members review their Part D coverage, be sure to understand the 2023 benefit changes of insulin cost sharing caps and no vaccine cost sharing. Also make sure to continue annual reviews with members as additional changes are phased in. And happy AEP!