In 2024, costs in the catastrophic phase will change: the 5% coinsurance requirement for Part D enrollees will be eliminated and Part D plans will pay 20% of total drug costs in this phase instead of 15%.
The 5% coinsurance requirement for Part D enrollees in the catastrophic phase will be eliminated
In 2024, once Part D enrollees without low-income subsidies (LIS) have drug spending high enough to qualify for catastrophic coverage, they will no longer be required to pay 5% of their drug costs, which in effect means that out-of-pocket spending for Part D enrollees will be capped. In 2024, the catastrophic threshold will be set at $8,000. This amount includes what Part D enrollees spend out of pocket plus the value of the manufacturer price discount on brands in the coverage gap phase. At this amount, Part D enrollees who take only brand-name drugs in 2024 will have spent about $3,300 out of their own pockets and will then face no additional costs for their medications.
To understand the impact of this change, it helps to consider what Part D enrollees without LIS currently pay for high-cost medications. For example, for the five drugs with the highest per capita Part D expenditures in 2021 used by more than 10,000 Part D enrollees – Revlimid, Pomalyst, Imbruvica, Jakafi, and Ibrance, all cancer treatments – annual out-of-pocket costs per drug in 2023 range from over $11,000 to nearly $15,000, and out-of-pocket costs for each drug in the catastrophic phase alone range from around $8,000 to nearly $12,000 (see methods for details) (Figure 2). (These estimates exclude the cost of other drugs that users of these drugs might be taking.) Eliminating the 5% coinsurance requirement in the catastrophic phase in 2024 means that Part D enrollees without LIS who use these or other high-cost medications covered by Part D will see thousands of dollars in savings.
Part D plans will pay a somewhat larger share of total drug costs above the catastrophic threshold
With the elimination of the 5% coinsurance requirement for Part D enrollees in the catastrophic coverage phase, Part D plans will be required to pay 20% of total drug costs in this phase in 2024, up from 15% in 2023 and prior years.
If you have any questions or concerns, please contact your Total Benefit Solutions, Inc Medicare health insurance specialist at (215)355-2121.