Skip to main content

Out-of-Pocket Costs Vary Significantly for Medicare Parts B and D

News  |  By Jack O'Brien  
   May 22, 2018

President Trump's call to lower prescription drug prices by leveraging Medicare must accommodate significant price differences. 

The Trump administration's announced efforts to fold prescription drugs offered under Medicare Part B into Part D must account for substantial out-of-pocket price differences among beneficiaries, according to analysis by Avalere Health.

The Washington, D.C.–based healthcare consultancy highlighted the potential complexities of enacting aspects of the drug-pricing proposal in a report released Monday.

According to the study's authors, Health and Human Services should formulate an effective policy that addresses a beneficiary's income level, the mix of drugs a patient has, as well as the potential upward pressure on Part D premiums from shifting Part B drugs.

“Medicare beneficiaries typically have lower out-of-pocket costs in Part B – especially since so many seniors carry supplemental coverage,” said Richard Kane, senior director at Avalere. “Any proposal for shifting drugs to Part D needs to account for these differences.”


Related: Trump's Drug Pricing Plan Praised, Panned, Parsed

Related: What's in Trump's 'American Patients First' Plan?

Related: 'Eliminating the Middlemen': Trump Takes Aim at PBMs in Drug Pricing Speech


Below are highlights from Avalere's analysis:

  • If cancer therapies or high-cost drug therapies were to switch from Part B to Part D, many Medicare patients would pay more out-of-pocket.

  • Avalere attributes this to patients purchasing supplemental health coverage for Part B medical services and are therefore not eligible for low-income cost-sharing services in Part D.

  • However, if the switch were implemented, Medicare patients without supplemental health coverage and those eligible for low-income cost-sharing services would pay less out-of-pocket.

  • In 2016, the average out-of-pocket costs were 33% higher for Part D-covered cancer therapies than for those under Part B.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.


Get the latest on healthcare leadership in your inbox.