Six Key Changes to Medicare in 2019
Medicare tinkers with its benefit offerings every year, and 2019 is no exception. For the new year, Medicare will focus on providing additional plan choices and reducing administrative burden on prescription drug plans. Here are the six key changes to Medicare plans that will take effect next year.
Shrinking the Doughnut Hole
The Part D doughnut hole, or the coverage gap, begins when the enrollee reaches the initial coverage limit and before catastrophic coverage kicks in. Under the Affordable Care Act, the doughnut hole has been reduced annually so it would close completely by 2020. However, the changes made in the Bipartisan Budget Act of 2018 will close the doughnut hole in 2019 for branded drugs. Because of BBA, the beneficiaries pay 25 percent cost-sharing on all branded drugs (down from the 35 percent in 2018) and 37 percent of the cost of generic drugs (down from 44 percent in 2018). The cost of closing the doughnut hole one year early is shifted to the drug manufacturers, who will pay 70 percent of the discount for branded drugs (up from 50 percent).
More Medicare Advantage Options, Dip in Premiums
Medicare Advantage plans account for 35 percent of total Medicare enrollments in 2018 (Decision Resources Group data, June 2018). Effective 2019, insurance companies can offer multiple plans in a service area without offering a meaningful difference in plan on premiums, cost-sharing, or benefits. According to the Kaiser Family Foundation, 14 insurers will enter the MA market for the first time; increasing the number of MA plans to 3,700 in 2019, an increase of 600 plans. CMS estimates the MA plan average monthly premium will drop by $1.81 to $28 in 2019, and the Medicare Part D average basic premium is expected to decline from $33.59 per month to $32.50 per month. Also in 2019, the maximum deductible rises slightly to $415 from $405.
Implementation of Part B Step Therapy
MA plans will now implement step therapy for Part B drugs, giving them an opportunity to negotiate drug prices and increase utilization of biosimilars. The savings obtained through these negotiations will be passed on to beneficiaries in the form of rewards and incentives through plans’ drug management care coordination programs. Lower drug costs may result in reduced cost-sharing and lower out-of-pocket costs for the patients. The policy will impact how insurers cover drugs for life-threatening diseases like cancer, while requiring coverage of at least two alternatives.
Provision for Supplemental Benefits
Medicare Advantage plans usually provide additional benefits such as vision and dental care, which are not available with the original Medicare plan option. Under the new legislation, MA plans can include supplemental benefits such as lifestyle support services, meal delivery, transportation to and from medical appointments, home safety modifications (like handrails and ramps), and telehealth services.
Flexibility to Switch Plans
Medicare Advantage gets a grace period that runs from Jan. 1, 2019 to March 31, 2019. During this period, members can switch from one MA plan to another or back to a traditional Medicare plan. Only one switch is allowed during this time every year.
Patients Over Paperwork Initiative
CMS’s new policy, “Patients Over Paperwork,” is an initiative aimed at alleviating administrative burden on the providers by removing unnecessary Medicare compliance requirements for healthcare facilities. The policy is slated to save providers an estimated $1.12 billion annually. According to CMS, the policy will allow patients to make informed decisions; remove regulatory obstacles; develop innovative approaches to improving quality, accessibility, and affordability; and improve beneficiaries’ customer experience.
Since plans’ required share of spending is reduced in the drug coverage gap, health plans bid lower premiums in 2019, saving both CMS and the federal government money in the short run. As popular MA plans expand their range of programs in 2019, the key outcome is how well health insurance companies adopt and implement the policy changes into their plan benefits to retain old members while attracting new members. Well-marketed changes increase the likelihood of higher MA adoption in future years.