Saturday marked the end of the three-month transition of the Medicare Part D prescription drug coverage to private insurer formularies. Critics clamored that the switch to the new formularies was certain to create access problems and leave patients without the prescription drugs they need, but the facts do not support these dire predictions.
The Center for Medicaid and Medicare Studies analyzes formularies to ensure that the drug lists are not too restrictive, and that each formulary includes at least two drugs in each category, determined by widely accepted classifications. (Two drug options represents the minimum, according to CMS formulary guidelines, and more than two may be required “where additional drugs present unique and important therapeutic advantages in terms of safety and efficiency.”) If a necessary drug is not included in an insurer’s formulary, patients have been promised a timely ruling on their application for a formulary exception.
That there are simply too many plans for seniors to understand and evaluate their options is another common charge from opponents. Even with the myriad prescription drug plans open to beneficiaries, however, seniors are not overburdened by choice, two recent surveys demonstrate. The surveys, sponsored by America’s Health Insurance Plans, show that of seniors who signed up for the Medicare drug benefit, the vast majority (84 percent) had no difficulties enrolling. And finding the right plan is worth the effort of shopping around, two-thirds said. For those who were automatically enrolled, 90 percent had little difficulty receiving their prescription drugs.
Through competition between providers, the Medicare prescription drug coverage seeks a balance between reining in the cost of prescriptions and encouraging pharmaceutical advancement. The benefit has been successful cutting the cost to consumers, with average savings of 57 percent with the lowest-cost plan and up to 42 percent with the median plan. As well as lower out-of-pocket expenses, overall growth in drug spending is expected to be slightly less under Part D.
The market-driven nature of this program doesn’t force drug prices to unsustainably low levels, which would impede medical progress, the way that a government-controlled “single payer” system might do. The success of Part D is crucial, as the effectiveness of empowering consumers to choose between competing plans will shape future reforms to the Medicare system.