Health Affairs August 13, 2024
A combination of government policies and market trends is causing significant turmoil in the Prescription Drug Plan (PDP) market, especially for plans that serve beneficiaries who receive the Medicare low-income subsidy (LIS)—assistance under the Medicare Part D Extra Help program that supports individuals in need of financial assistance to afford their prescription medications.
Here’s what’s going on:
Cost Challenges: The Part D redesign implemented under the Inflation Reduction Act (IRA) has (intentionally) increased the prescription drug cost liability of Medicare Advantage Prescription Drug (MAPD) and standalone Prescription Drug Plans (PDPs). This mounting financial pressure poses significant challenges for MAPDs and standalone PDPs. However, MAPDs are far better suited to spread this risk across their overall medical spend liabilities and leverage...
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