CMS’s annual release of Medicare Part D payment benchmarks and other bid-related information for the coming plan year tells pretty much the same story as in years past. The national average bid amount will continue to go down, while reinsurance amounts will continue to rise and premiums will see a slight increase.
“It’s just a continuation of things that we’ve seen for a while now. Reinsurance was relatively flat from 2018 to 2020, but it’s been going up” as the expanded use of high-cost therapies leads to higher catastrophic-phase spending, explains Tom Kornfield, senior consultant with Avalere Health. That trend has been closely tracked by the Medicare Payment Advisory Commission, which continues to advocate for a Part D redesign. As Congress considers drug pricing legislation, such information could provide “more support for folks who want to restructure the Part D benefit,” suggests Kornfield.
“If you look at the components of the direct subsidy and how they changed this year, it was very similar to how they changed from 2020 to 2021,” adds Shelly Brandel, a principal and consulting actuary with Milliman. “The increases in the national average reinsurance subsidy have been higher than the increase in total program costs, so that component of the direct subsidy has been trending higher than other components and the percentage increase was the same for both years.”
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