Michael Hiltzik writes for the LA Times that people with Medicare are paying more for generic drugs even though generic drug prices overall have barely increased. According to Avalere, a healthcare consulting firm, older adults and people with disabilities are paying almost twice as much out-of-pocket for generic drugs through Medicare Part D today as they did seven years ago. How can this be?
The reason for high out-of-pocket costs for generics is that CMS allows Part D plans to decide the copays (the part of the cost individuals pay) for their drugs. And, the Part D plans want them to be as high as possible. If they impose higher copays, Part D plans can keep their monthly premiums from going up as much, allowing them to attract more enrollees. By so doing, they penalize their enrollees who need these drugs, driving up their costs and jeopardizing their access to needed medicines.
As a result of copay increases in Medicare Part D plans, people with Medicare paid $6.2 billion more in 2015 than they did four years before, a 93 percent increase. Copays increased on important cost-effective cholesterol drugs, hypertension drugs and diabetes drugs, all of which are prescribed widely. Generic drug prices increased just 1 percent in that period.
Part D plans have moved most generic drugs out of the tier 1, lowest copay category, and into the tier 2 category. More than 70 percent of generic drugs were in the tier 1 copay category in 2011. By 2015, only 19 percent were in the tier 1 category. And almost all Part D plans changed their tier structure from four to five tiers. These copay increases are a way of rationing care based on ability to pay; they keep people who need these drugs from taking them, endangering their health.
Here’s more from Just Care: