The Age of Coinsurance: Flat Copays Are Becoming Scarce in Medicare Part D
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Feb 27, 2025
Stand-alone Medicare Part D Prescription Drug Plans (PDPs) significantly increased their use of coinsurance for popular branded medications between 2020 and 2024, leading to much higher out-of-pocket costs for beneficiaries, according to an analysis published on Feb. 14 in JAMA. Erin Trish, Ph.D., the study’s lead author, tells AIS Health that the results indicate the PDP market “is exposed to inflated list prices through coinsurance” and adds, “if we don’t address PBM reform, you’re leaving beneficiaries in the dust.”
Meanwhile, an Avalere analysis of Part D formulary files found that 63% of Medicare Advantage Prescription Drug (MA-PD) plans this year have at least two coinsurance tiers, up from 18% last year, and that 83% of PDPs have three coinsurance tiers this year, up from 57% last year. Kylie Stengel, an Avalere associate principal, tells AIS Health that the shift from flat copayments to coinsurance is a “cost-management tool” that payers are using due to Inflation Reduction Act (IRA) provisions that went into effect this year, including a $2,000 out-of-pocket maximum for drugs that led to Part D plans “taking on a lot more liability” for pharmacy spending among its members.
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