Capping Medicare Beneficiary Part D Spending at $2,000: Who Would it Help and How Much?

A nursing aid talks with a resident of a nursing home.

A proposed out-of-pocket spending cap in Medicare Part D would protect eligible seniors from recurring high drug payments.

 

 

The Issue

Medicare Part D enrollees remain at risk of increasing prescription drug payments year after year. A new analysis shows that a proposal to cap out-of-pocket expenses in Medicare would lower prescription drug prices by an average of $900 for eligible seniors while raising overall Medicare program spending levels by less than 1 percent.

Key Findings

  • A $2,000 cap on prescription drug out-of-pocket costs for Medicare Part D enrollees who do not qualify for cost-sharing protections would save more than 860,000 enrollees an average of $900 annually.

  • The proposal would increase Medicare spending by less than 1 percent.

  • Certain enrollees would benefit substantially from the proposed cap:

    °    40 percent of those who saw out-of-pocket Part D expenses greater than $2,000 annually spent $2,000 to $2,500.

    °    30 percent spent $2,500 to $3,000 

    °    12 percent spent $3,000 to $3,500 

    °    18 percent spent more than $3,500

Conclusion

Researchers determine that a spending cap in Medicare Part D would help protect individuals and their families from withstanding high drug payments year after year and enhance the overall benefit of the Medicare Part D program without substantially raising the program’s costs.

About the Urban Institute

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