Some may face affordability challenges after Part D redesign

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Medicare Part D may be the target of reforms, but a new analysis from consulting firm Avalere has found that beneficiaries may still face challenges when it comes to affording their medications.

The Inflation Reduction Act (IRA) included several changes to the Part D benefit design that improves affordability for Part D enrollees. Beginning in 2024, the IRA establishes a beneficiary out-of-pocket (OOP) cap at the catastrophic threshold, estimated to be about $3,233 in OOP costs, not including manufacturer coverage gap discounts. In 2025, the act redesigns the Part D benefit to cap beneficiary OOP costs at $2,000, and changes plan and manufacturer liability throughout the benefit.

Part D plans will also be required to allow any Part D enrollee to spread their OOP costs over the course of the plan year – known as “OOP smoothing” – beginning in 2025.

Even with these reforms, some beneficiaries may still face affordability challenges resulting from the timing of their prescription fills and their income, the report found. Those most at risk of continued affordability challenges could include beneficiaries with limited income who do not receive cost sharing support through the low-income subsidy (LIS); those who, in 2024, have high OOP costs in a short period of time before the OOP smoothing program launches; and those who, in 2025, incur most of their OOP costs later in the plan year (due to a new diagnosis, for example) when the horizon of time…

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