Medicare Enrollees May Still Face Affordability Issues After Part D Benefit Redesign

About 800,000 Medicare beneficiaries in 2024 and 200,000 in 2025 could see their out-of-pocket (OOP) medication costs exceed 10% of their annual income, even with the Part D drug benefit reforms passed via the Inflation Reduction Act (IRA), according to an Avalere analysis.

The IRA will establish a beneficiary OOP cap at the catastrophic threshold, which is estimated to be $3,233 in 2024. Avalere estimated that 1.5 million Part D enrollees without low-income subsidies (LIS) are projected to reach OOP drug spending levels above the catastrophic threshold in 2024. Among them, about 18% of beneficiaries will reach the catastrophic phase in the first three months. Greater shares of beneficiaries who are younger than 65 years old or who are Hispanic will face affordability challenges compared to the average non-LIS enrollees. The analysis also suggested that non-LIS enrollees taking asthma drugs, blood thinners, immunology therapies, cancer treatments and HIV drugs are more likely to reach the OOP cap in 2024.

© 2024 MMIT
Jinghong Chen

Jinghong Chen Reporter

Jinghong has been producing infographics and data stories on employer-sponsored insurance, public health insurance programs and prescription drug coverage for AIS Health’s Health Plan Weekly and Radar on Drug Benefits since 2018. She also manages AIS Health’s annual executive compensation database for top insurers and Blue Cross and Blue Shield affiliates. Before joining AIS Health, she interned at WBEZ, Al Jazeera English and The New York Times Chinese. She graduated from Missouri School of Journalism with a focus on data journalism and international reporting.

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