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NBC News
2 days ago
- Health
- NBC News
Medicare Part D premiums are likely to go up next year. Here's why.
Medicare enrollees who buy the optional Part D drug benefit may see substantial premium price hikes — potentially up to $50 a month — when they shop for next year's coverage. Such drug plans are used by millions of people who enroll in what is called original Medicare, the classic federal government program that began in 1965 and added a drug benefit only in 2006. The drug plans are offered through private insurers, and enrollees must pay monthly premiums. It's not known whether insurers will pursue the maximum increase allowed, as premium prices for next year won't be revealed until closer to open enrollment, which starts Oct. 15. Increases are expected to mainly affect stand-alone Part D plans, not the drug coverage offered as part of Medicare Advantage, the private sector alternative to original Medicare. More on that later. Policy experts say premiums are likely to go up for several reasons, including increased use of some higher-cost prescription drugs; a law that capped out-of-pocket spending for enrollees; and changes in a program aimed at stabilizing price increases that the Trump administration has continued but made less generous. One thing is surer than ever, say many policy experts: Beneficiaries should not simply roll over their existing stand-alone Medicare drug plans. 'Everyone should shop plans in open enrollment,' said Stacie Dusetzina, a professor of health policy at Vanderbilt University Medical Center. Here are three reasons prices would rise. 1. It's the spending! Every year, insurers keep an eye on what they're spending on drugs so they can build that into their premium estimates. Spending covers both the prices charged by drugmakers and volume, meaning how many people take the medications and how often. And it's up. Spending by insurers and government programs for prescription drugs in 2024 across the market grew more than 10%, which is slightly greater than in recent years, according to a research report published last month in the American Journal of Health-System Pharmacy. Estimates are not yet available for this year's trends. Still, in 2024, researchers found that drug prices overall decreased slightly. Spending rose because of drugs coming on the market and increased utilization, especially for pricey weight loss drugs and another category of medications that treat various autoimmune conditions, such as rheumatoid arthritis. Such increased use is evident in Medicare. Many beneficiaries, for example, are treated for autoimmune conditions. And even though Medicare doesn't cover treatment for weight loss, many members have diabetes or other conditions that the new weight loss drugs can treat. The Trump administration, according to The Washington Post, is considering a five-year pilot program in which Medicare Part D plans could voluntarily expand access to the drugs, which can cost more than $1,000 a month without insurance. Details have not yet been provided, but the pilot program would not begin in Medicare until 2027. Another wild card for insurers is the Trump administration's tariffs on businesses that purchase products made overseas, which could boost drug prices because the U.S. imports a lot of its pharmaceuticals. Much, however, remains unknown about whether drugmakers will pass along any additional tariff costs to consumers. So, while rising spending is one factor, it isn't the only reason next year's premium prices are expected to go up. 2. New out-of-pocket caps for consumers Changes made to Medicare aimed at helping people with high out-of-pocket costs for expensive medications may be a bigger factor. Here's why: Starting this year, Medicare enrollees have a limit on how much they must pay out-of-pocket for prescription drugs. It's capped at $2,000, a threshold that will rise each year to cover inflation. Lawmakers in Congress set those changes in the Inflation Reduction Act under President Joe Biden. The law also shifted a larger share of the cost of drugs used by Medicare beneficiaries from the federal program to insurers. That $2,000 cap is a big change from previous years, when people taking expensive drugs had a higher threshold to meet annually and were on the hook to pay 5% of the drug's cost even after meeting that amount. Those additional 5% payments ended last year under the provisions of the IRA. Before that law passed, 'people would spend $10,000 or $15,000 out-of-pocket each year just for a single drug,' Dusetzina said. 'The Inflation Reduction Act was necessary to make Part D proper health insurance, but there's a cost to do so.' While the cap is a big help for affected consumers, the reduced amounts paid by some beneficiaries — coupled with the cost shift to insurers — could lead plans to spread their increased expenses across all policyholders through higher premiums. A growing number of health plans have also begun to require enrollees to pay a percentage of a drug's cost, rather than a flat-dollar copay, which can lead to larger-than-expected costs at the pharmacy counter, Dusetzina said. While consumers not currently taking high-cost specialty drugs may not see a benefit in the $2,000 cap initially, they might one day, say policy experts, who note that drugmaker prices continue to rise and that enrollees could fall ill with a condition like cancer or multiple sclerosis for which they need a very high-priced drug. 'It's important to think not just in context of those groups who hit the cap every year, but also people are paying more in premiums to protect their future selves as well,' said Casey Schwarz, the senior counsel for education and federal policy at the Medicare Rights Center, an advocacy group. The new prescription drug cap and other changes apply to both the stand-alone Part D drug plans and Medicare Advantage plans. But those Medicare Advantage plans are not expected to increase the drug portion of their premiums, partly because the private sector plans are paid more per member than what it costs taxpayers for the traditional program. That means Advantage plans have far more money to add benefits, such as vision and dental coverage, which traditional Medicare does not include, or to use them to cushion the impact of rising spending on drug costs, thus limiting premium increases. Those additional benefits are advertised to attract customers to Medicare Advantage, which also sometimes offers plans with minimal or no monthly premium costs. There are other differences between traditional Medicare and private sector plans. For example, Advantage members must stick to doctors and hospitals in the plan's networks, and they may face more prior authorization or other hurdles than in the traditional program. The growing difference between premiums — fueled by the extra rebates flowing to the private sector plans — 'is increasingly tilting coverage toward Medicare Advantage and making traditional Medicare plus a stand-alone PDP [prescription drug plan] unaffordable for many enrollees,' said Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a health information nonprofit that includes KFF Health News. 3. Trump administration reduced funding meant to slow premium growth The final factor in the premium increase equation is a program set up to slow the rise of premiums in stand-alone Part D plans. It began under the Biden administration to offset premium increases tied to changes in the Inflation Reduction Act by temporarily injecting additional federal dollars to help insurers adjust to the new rules. That plan sent just over $6 billion this year to Part D insurers. And it had an effect. The average monthly premium for a stand-alone Part D drug plan dropped 9%, from $43 last year to $39 this year, according to KFF, even when factoring in that some plans raised prices by up to $35 a month, the maximum increase allowed under the stabilization plan for this year. In a memo released in late July, the Trump administration said it would continue the program for next year, while shaving about 40% of the funding. A government official told The Wall Street Journal that the administration felt that keeping the full funding would have mainly benefited the insurers and cost taxpayers an 'enormous, excess amount.' The stabilization effort next year will send $10 a month per enrollee to Part D insurers to help keep premiums in check, down from $15 this year. Among other changes, it allows insurers to raise premiums by as much as $50 a month, up from the $35 allowed this year. That would be a substantial increase, Cubanski noted, although it is not clear just how many insurers would pursue the full amount. 'We did see some plans this year were taking premium increases of that $35 amount in 2025, and I fully expect we will see some plans with increases up to $50 a month' next year, she said. Another reason to take a close look at all the options once open enrollment begins.
Health Line
4 days ago
- Health
- Health Line
Medicare Coverage of Xiidra
Medicare may cover Xiidra (lifitegrast ophthalmic solution) if you have a plan with prescription drug coverage, such as a Part D plan or a Medicare Advantage (Part C) plan. Xiidra is a brand-name drug that doctors may prescribe to treat the symptoms of dry eye disease. Medicare and Xiidra Xiidra belongs to a group of drugs called a lymphocyte function-associated antigen-1 (LFA-1) antagonist. The drug is approved by the Food and Drug Administration (FDA) to treat the signs and symptoms of dry eye disease. To receive coverage for Xiidra, you need to have a Medicare prescription drug plan. If you have Original Medicare (parts A and B), you can enroll in a stand-alone Part D plan to cover your medications. If you have a Medicare Advantage plan, you likely have prescription drug coverage as part of your plan. However, not all Medicare Advantage plans include drug benefits. Private insurance companies offer Medicare drug plans, and their lists of covered drugs differ. Your plan will cover Xiidra if it's included in the plan's formulary. More than half of Medicare drug plans cover Xiidra. Review your plan's documentation or contact a representative to learn whether it covers Xiidra. If it does not, it may cover an alternative medication for dry eye disease. The Centers for Medicare & Medicaid Services (CMS) offers a coverage finder tool to allow users to find plans in their area that include coverage for Xiidra. Xiidra cost with Medicare The amount you pay for Xiidra will depend on a few factors. These include your location, your plan, and the drug's tier. Medicare prescription drug plans group covered drugs into cost tiers. Xiidra is typically a higher tier drug, with no generic version. The amount you pay for Xiidra will also depend on what stage of coverage you are in. In 2025, most Part D plans have three stages of coverage. Beneficiaries will have different out-of-pocket expenses depending on the stage: Deductible stage: If your plan has a deductible, you'll pay the full cost of the medication until you reach your deductible amount. In 2025, the maximum deductible amount for a Part D plan is $590. Initial coverage stage: After meeting your deductible, you'll pay a 25% coinsurance on the cost of covered medications until your out-of-pocket costs reach $2,000. Catastrophic stage: Once you've spent $2,000 in a calendar year, you'll pay no more for covered medications. If you qualify for cost assistance through the Extra Help program, your costs will be lower.
Health Line
4 days ago
- Health
- Health Line
Medicare Coverage of Revlimid
Medicare may cover Revlimid (lenalidomide) if you have a plan with prescription drug coverage, such as a Part D plan or a Medicare Advantage (Part C) plan. Revlimid is a brand-name drug that doctors may prescribe to treat conditions including multiple myeloma and mantle cell lymphoma in certain adults. Medicare and Revlimid Revlimid is a type of drug called a thalidomide analogue. The drug is approved by the Food and Drug Administration (FDA) to treat the following conditions: myelodysplastic syndromes multiple myeloma marginal zone lymphoma follicular lymphoma mantle cell lymphoma To receive coverage for Revlimid, you must have a Medicare prescription drug plan. If you have Original Medicare (parts A and B), you can enroll in a stand-alone Part D plan to cover your medications. If you have a Medicare Advantage plan, it might cover prescription drugs. Not all Medicare Advantage plans include drug benefits. Private insurance companies offer Medicare drug plans, and their lists of covered drugs differ. Your plan will cover Revlimid if it's listed in their formulary. Most Medicare drug plans cover Revlimid. Review your plan's documentation or contact a representative to learn whether it covers Revlimid. If it does not, it may cover an alternative medication. The Centers for Medicare & Medicaid Services (CMS) offers a coverage finder tool to allow users to find plans in their area that include coverage for Revlimid. Revlimid cost with Medicare The amount you pay for Revlimid will depend on a few factors, including your location, your plan, and the drug's tier. Medicare prescription drug plans group covered drugs into cost tiers. Revlimid is typically a higher-tier drug, although it has generic version. According to Revlimid's manufacturer, the list price for the drug is $18,723 per 28-day cycle. The amount you pay for Revlimid will also depend on what stage of coverage you are in. In 2025, most Part D plans have three stages of coverage. Beneficiaries will have different out-of-pocket expenses depending on the stage: Deductible stage: If your plan has a deductible, you'll pay the full cost of the medication until you reach your deductible amount. In 2025, the maximum deductible amount for a Part D plan is $590. Initial coverage stage: After meeting your deductible, you'll pay a 25% coinsurance on the cost of covered medications until your out-of-pocket costs reach $2,000. Catastrophic stage: Once you've spent $2,000 in a calendar year, you'll pay no more for covered medications.
Forbes
07-08-2025
- Business
- Forbes
Looking Ahead: The Medicare Prescription Payment Plan In 2026
2025 has been a busy year as some of the Inflation Reduction Act initiatives have taken effect. The biggest one is probably the cap on Part D out-of-pocket costs. This year, the most a drug plan enrollee will pay for covered drugs from an in-network pharmacy is $2,000. The other big change, the Medicare Prescription Payment Plan (MPPP) is connected to this cap. Those who reach the threshold can face a big bill at the pharmacy. For instance, one specialty drug could in the first month of the year hit the limit. The MPPP allows an enrollee to spread the payments out over the course of the calendar year, instead of all at Basics For those who are new to this, here's a quick review of 10 important Coming After the inaugural year of the MPPP, it's time to look at what is scheduled to happen next threshold will increase from $2,000 to $2,100.A participant in the MPPP this year will be reenrolled automatically for 2026. The drug plan must send the renewal notice after the end of the annual coordinated election period (Open Enrollment) but prior to the beginning of the plan year (January 1). Two points about automatic renewal: I could not find any mention about how automatic renewal will handle those who have had a change in their medications and no longer would reach the $2,100 cap. The monthly billing in those situations often starts out low but then increases significantly heading toward the end of the an enrollee gets a new medication that hits the point-of-sale notification threshold, the pharmacy must issue the Medicare Prescription Payment Plan Likely to Benefit Notice. (In 2025, the trigger is $600.) CMS had considered requiring the Part D plan sponsors to ensure that pharmacies were prepared to inform the enrollee about the actual out-of-pocket cost of the drug; however, that was not finalized. Instead, CMS 'continues to encourage pharmacies to leverage standard industry transaction set data to provide OOP costs to participants verbally upon request.' Because education about the MPPP is the plan's responsibility, customers may leave the pharmacy without the prescription until they figure out the impact on their monthly a Part D plan bills an MPPP enrollee over the maximum monthly cap (determined by a formula), it should work with the individual to decide whether to refund the difference or apply the overpayment to the remaining out-of-pocket is difficult to find current MPPP enrollment numbers. Avalere Health reported that, of the 1.2 million beneficiaries who met the threshold, only 190,000 (16%) who picked up a medication in February 2025 were enrolled. There are probably several reasons why so many did not sign up for the MPPP together with the $2100 cap can help drug plan enrollees manage the cost of their medications. But at the same time, those who choose to ignore this new Medicare program won't be financially punished. The prescription drug coverage will still be there.
Forbes
05-08-2025
- Business
- Forbes
Let's Preview 2026 Medicare Part D Premiums, Costs; Prepare To Pay More
The Centers for Medicare and Medicaid Services has started releasing information about the 2026 costs and changes to Medicare. One of the first notices addresses Part D prescription drug plans. Five facts apply to most Medicare beneficiaries who have this Inflation Reduction Act limits the increase in the base premium to 6% and that is exactly how much it will increase next year. This premium factors into what enrollees pay but plans determine their specific premiums. It's unlikely anyone will be paying $ who go more than 63 days without creditable prescription drug coverage pay a penalty for the life of Part D coverage. It is 1% of the base premium, $0.3899 in 2026, for every month Part D enrollment was delayed. An example: A person who did not enroll for three years will pay an additional $14.40 (rounded to the nearest dime) every month. That's $1.15 more per month than in $25 increase is less than the $45 that happened this year. Plans can charge any amount up to the standard deductible.A quick review will help explain this change. With the introduction of the $2,000 cap on Part D drug costs in 2025, CMS feared there would be significant increases in Part D premiums. In response, CMS conducted a voluntary premium stabilization demonstration. This demonstration applied a $15 reduction to the base beneficiary premium and limited premium increases to $35. In 2026, the subsidy will continue; however, it will be $5 less than this year. Premium increases will be limited to $50, up from $35 in 2025. Those with Part D plans will likely face sticker shock. This likely won't happen to those with Medicare Advantage plans. The government provides subsidies in the form of rebates. In 2025, plans received more than $500 per enrollee to lower or reduce Part D premiums and offer supplemental Part D benefits. Over 75% of enrollees pay no monthly premium for their Medicare Advantage plans with no or lower drug plan is a bit of good news amidst all the cost increases. The most anyone will pay for covered Part D drugs from an in-network pharmacy will increase $100 from year, I repeatedly said the Open Enrollment Period would be the most important ever. And once again, in January, I heard from those who did not pay attention. They were stuck with higher costs that could have been avoided had they followed my advice. In about seven weeks, plans will send out the Annual Notice of Changes. Please open and review that closely. Then, take the time to check out what other plans have to offer. And, if Medicare Advantage looks attractive, go beyond the drug plan premium to determine how that coverage will work for you.
