Analysis of Medicare Part D coverage, finds affordable access out of sight for some

People who are not eligible for low-income subsidies could pay up to a whopping $4,000 out of pocket for HIV medications each year, new projections found.

“In this national analysis, despite Medicare’s mandate that Part D insurance plans cover antiretroviral therapies [ART] and preexposure prophylaxis [PrEP], high drug prices mean that patients face out-of-pockets costs of $3,000 to $4,000 annually under a standard benefit,” wrote study first author Chien-Wen Tseng, MD, MPH, a physician-researcher with the University of Hawaii’s school of medicine, and colleagues, in JAMA Network Open. “Such cost-sharing indicates that for beneficiaries, affordable access to ART or PrEP may depend on them receiving taxpayer subsidies to lower out-of-pocket costs.”

Tseng and colleagues assessed how costs for the drugs are divided among patients, payers, the government, and drug makers for 1 year of ART or PrEP. Those calculations can be notoriously complex, which means cost sharing for these drugs and in these populations has historically been difficult to discern.

In an editorial accompanying the study, Julie Myers, MD, MPH, an infectious disease specialist with Columbia University’s school of medicine in New York, who was not affiliated with the study, called the findings “staggering.”

“The study by Tseng and colleagues helps to answer a critical, practical question about such gaps: exactly how much do individuals with Medicare Part D health plan coverage pay in out-of-pocket costs for antiretroviral drugs for treatment or prevention?” Myers wrote.

Roughly 38,000 new HIV infections occur each year, Tseng and colleagues noted. In 2019, the federal Ending the HIV Epidemic initiative sought, among other goals, a 75% reduction in new infections. Two goals of the initiative were to sharply increase ART for HIV patients with undetectable virus levels (to prevent transmission) and PrEP for those at risk of acquiring HIV.

The catch is that the medications cost tens of thousands of dollars annually, placing a potentially insurmountable financial burden on patients. ARV prices rose 34% between 2012 and 2018.

Medicare Part D, which covers 70% of Medicare beneficiaries, imposes cost-sharing among patients, insurers, manufacturers, and Medicare. Previous studies found that Part D beneficiaries can face big out-of-pocket costs for expensive cancer and rheumatoid arthritis drugs. Low-income subsidies are available—77% of Medicare beneficiaries with HIV received them in 2014, according to Tseng and colleagues—but the cost-sharing structure still obscures who’s actually paying for what, particularly when beneficiaries are not eligible for subsidization.

Tseng and colleagues evaluated 18 ART and 2 PrEP regimens for 1 year for treatment or prevention under a 2019 standard Medicare Part D insurance plan.

For each regimen, researchers projected annual costs assumed by patients, insurance plans, manufacturers, and Medicare based on 4 phases. The first was the patient deductible, which is fixed at $415. The second was the covered phase, in which patients pay part of the cost, with insurance plans paying the remainder. The third was the notorious “donut hole” coverage gap, which kicks in after costs reach $3,820—for brand-name drugs, patients cover 25% of the cost with the manufacturer and insurance plan covering 70% and 5%, respectively, with generic drug costs divided by the patient (37%) and manufacturer (63%). The fourth was catastrophic coverage, which sees costs shared among patients (5%), insurance plans (15%), and Medicare (80%) until the end of the year after out-of-pocket costs reach $5,100.

In 2019, ART prices ranged from $24,010-$46,770 annually (median price $35,780). Patients were projected to pay 9-14% of the cost ($3,270-$4,350), while insurance plans were projected to pay 18-24% ($5,340-$8,450), manufacturers 6-11% ($2,370-$2,750), and Medicare 53-67% ($12,770-$31,270).

The price of PrEP was a median of $20,570 annually, with patients contributing 15% ($2,990), insurance plans covering 22% ($4,570), manufacturers covering 13% ($2,750), and Medicare covering 50% ($10,260).

When including low-income subsidies, Medicare paid 67%-76% of ART and approximately 65% of PrEP costs.

“Half to two-thirds of the cost of ART and PrEP is borne by Medicare rather than insurance plans or manufacturers,” Tseng and colleagues observed. “To end the HIV epidemic by 2030, it appears that policies must address both high drug prices and revamp Medicare Part D cost-sharing.”

Study limitations identified by the authors included the fact that they projected cost-sharing based only on use of each ART or PrEP and no other drugs under a standard 2019 Part D plan.

At the heart of the issue, according to experts, is the ongoing challenge of high drug prices. Although a solution to that problem does not appear to be immediately forthcoming, Myers wrote in the accompanying editorial that there may be other ways to address the issue, including by allowing Medicare to negotiate drug prices.

“The concern with such a high cost burden on the individual is that adherence and, ultimately, health outcomes, are likely to deteriorate,” Myers wrote. “For although success in ending HIV/AIDS in the US will obviously come at a price, we need to find a way to avoid burdening the people who are underserved and draining public coffers—a way to pay these costs fully without paying dearly.”

  1. People who have or are at risk of acquiring HIV pay $3,270-$4,350 each year for antiretroviral therapies if they do not have a low-income subsidy.

  2. Without taxpayer subsidies to lower out-of-pocket costs, antiretroviral drug therapies and PrEP are out of reach for many.

Scott Harris, Contributing Writer, BreakingMED™

No source appearing in this article disclosed any relevant financial relationship with industry.

Cat ID: 339

Topic ID: 338,339,339,730,125,27,520,192,151,463,925

References

Tseng CW, et al “Medicare Part D and cost-sharing for antiretroviral therapy and preexposure prophylaxis” JAMA Network Open 2020; 3(4):e202739.

Myers JE “Cost-sharing under Medicare Part D: Paying dearly to end the HIV epidemic?” JAMA Network Open 2020; 3(4):e202835.