Voice For Health & Progress

Medicare Part D Beneficiaries Could See Increases in Brand Drug Co-Payments

Getting access to prescribed medicines is essential to maintaining good health and managing chronic conditions, but for some low-income seniors and individuals with disabilities, accessing affordable prescriptions that meet their specific healthcare needs could soon become more difficult. A proposal in the President’s FY 2016 budget calls for an increase in Medicare Part D brand prescription co-payments for Part D beneficiaries who receive the Low-Income Subsidy (LIS). This proposal could make it more challenging for these Part D beneficiaries to get necessary prescriptions. It could also limit patient choice and force changes in prescribed treatment, even when the generic alternatives may not be the best option for their particular health needs.

What is the Medicare Low-Income Subsidy?

The LIS program, also known as Extra Help, is an essential option for low-income Medicare Part D beneficiaries who otherwise might not be able to afford needed medicines. The LIS program/Extra Help provides financial assistance with premiums, deductibles and co-payments for those whose incomes fall below about $17,500 annually. According to the Kaiser Family Foundation about 11 million beneficiaries enrolled in Medicare Part D currently receive the low-income subsidy.

Access to Affordable Part D Coverage Should Not Be Disrupted

Already a successful program, Medicare Part D is keeping costs lower for beneficiaries and for taxpayers while helping to improve quality of life for millions of seniors and individuals with disabilities. Increasing brand drug co-pays will increase the cost burden for lower income Part D beneficiaries, while potentially compromising their access to needed care.

The Facts:

  • Generic drug use among low-income seniors and individuals with disabilities is already high and increasing.
    Available data show high generic use among beneficiaries who receive low-income subsidies. In fact, generic use for this group has increased steadily since the Part D program began. Further, when available, generic products are used the vast majority of the time with very little difference between LIS enrollees and other Part D enrollees.
  • Higher co-pays could limit patient choice and force changes in prescribed treatment.
    Physicians often prescribe brand medications based on greater disease burden or severity among LIS enrollees, and generic substitution is not always medically appropriate. Even for drugs that are approved to treat the same condition, some drugs may be more effective than others in treating individual patients.
  • Increasing co-pays for low-income beneficiaries could reduce adherence to needed medicines and lead to poor health outcomes.
    Cost-sharing amounts are an important factor affecting patient adherence to a prescribed treatment regimen. LIS beneficiaries tend to fill multiple prescriptions to address significant health care needs, such as multiple chronic conditions and functional or cognitive impairments. Higher cost sharing for brand medicines could force low-income beneficiaries to switch to less costly treatments that may not be as effective or tolerable, or they may stop taking prescribed medications altogether. Reducing adherence among low-income beneficiaries could potentially increase federal health care spending on otherwise avoidable medical care, such as hospitalizations.