CMS rolls back Medicare Part D deductibles for 2014

Photo: Washington Times
Photo: Washington Times

For the first time in the ten year history of the Medicare Part D program, the Centers for Medicare and Medicaid Services (CMS) announced on Friday in a new Call Letter that it will reduce the annual deductible.  The 2014 Call Letter sites greater protections, value, and care for Medicare beneficiaries.

The Call Letter takes important steps to improve payment accuracy for Medicare Advantage (Part C) and in Medicare prescription drug (Part D) plans for 2014, without shifting costs to beneficiaries. Since the Affordable Care Act was passed in 2010, Medicare Advantage premiums have fallen by 10 percent and enrollment is expected to increase by an estimated 28 percent through this year. In addition, costs of the defined standard Part D plan will be lower in 2014 than they are in 2013. The standard Part D deductible will be $310, down from $325 in 2013, and cost-sharing amounts will also be lower.

The 2014 statutory updates to the annual parameters for the defined standard Part D prescription drug benefit are:

Part D Benefit Parameters



Defined Standard Benefit



Initial Coverage Limit (Total drug costs after deductible before hitting coverage gap)



Out-of-Pocket Threshold  (Total amount beneficiary pays before hitting catastrophic phase)



Minimum Cost-sharing for Generic/Preferred Multi-Source Drugs in the Catastrophic Phase



Minimum Cost-sharing for Other Drugs in the Catastrophic Phase



Retiree Drug Subsidy (RDS)
Cost Threshold (Amount RDS sponsor must spend before claiming the RDS subsidy)



Cost Limit (Amount after which RDS sponsor claims no RDS subsidy)




Proposed guidance by the Call Letter increases value and protections for beneficiaries:

Lower Out-of-Pocket Drug Spending: Due to decreases in the cost of the Medicare prescription drug program, CMS is announcing for the first time since the inception of the program that the 2014 defined standard Part D prescription drug benefit will have lower co-payments and a lower deductible than in 2013. These costs are decreasing at the same time that coverage for Medicare beneficiaries in the Part D prescription drug coverage gap, or “donut hole” will continue to increase in 2014. As a result of the Affordable Care Act, in 2014, enrollees with liability in the donut hole will receive coverage and discounts of 52.5 percent on covered brand name drugs and 28 percent on covered generic drugs.

Greater Protection for Beneficiaries: CMS proposes to require Part D plan pharmacies to obtain enrollee consent prior to each delivery, unless the enrollee personally requests the refill. This proposal is in response to complaints from beneficiaries who have received and been charged for unnecessary and unwanted prescriptions because of “auto-ship” services. CMS intends to again use its authority, provided by the health care law, to protect Medicare Advantage enrollees from significant increases in costs or cuts in benefits, and, for the 2014 contract year, proposes reducing the amount of any permissible increase to $30 per member per month (down from $36 per member per month in previous years).

Improved Coordination of Care: CMS urges plans to broaden their target enrollee populations for medication therapy management (MTM). In accordance with the Affordable Care Act, CMS is interested in expanding shared decision-making within the Medicare Advantage program.

Meanwhile, a Washington Post story published on Saturday suggests that Price controls for Medicare Part D death sentence for patients:

There is a movement afoot in the government to curtail Medicare Part D — perhaps even discontinue it. Some believe that the feds should control the entire management of all prescription drugs, thus decreasing incentives for innovation for new drug research and creation.

According to Adam Frederic Dorin, M.D., MBA, “Some who believe that ‘bigger’ government control is ‘better’ have sided with the pro-Obamacare crowd. They are encouraging the Secretary of Health and Human Services to dismantle Medicare Part D, thus exercising unlawful discretionary powers, without Congressional permission or oversight.”


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