MedPAC: Reforms to Part D LIS Could Produce Savings

Although the Medicare Part D program’s low-income subsidy is designed to ensure all beneficiaries have access to drug coverage, the Medicare Payment Advisory Commission (MedPAC) is concerned that the LIS in its current format has the potential to limit competition among benchmark plans and result in higher Medicare spending. As policymakers seek ways to preserve the Medicare Trust Fund while expanding Medicare benefits, LIS reforms could save the program money, MedPAC suggested at its most recent public meeting.

The LIS subsidizes premiums for nearly 13 million Medicare Part D beneficiaries, or 27% of overall Part D enrollees. Spending for LIS premiums in 2019, the most recent year available, totaled $3.8 billion, according to a Sept. 2 presentation by MedPAC Principal Policy Analyst Eric Rollins.

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