Over 1 Million Part D Enrollees Had OOP Costs Above Catastrophic Threshold in 2017

More than 1 million Medicare Part D enrollees had out-of-pocket (OOP) drug costs above the catastrophic threshold in 2017, according to a Kaiser Family Foundation analysis, which found that average annual OOP costs exceeded $3200. The analysis included enrollees without low-income subsidies (LIS).

Since 2007, when there were 407,000 enrollees without LIS who had OOP drug costs above the catastrophic threshold, the number of these enrollees who had spending above the threshold has more than doubled, reaching 1 million enrollees in 2015, 2016, and 2017.

“As policy makers continue to discuss ways to reduce Medicare prescription drug spending, proposals to place a hard cap on out-of-pocket spending in Part D have gained bipartisan support in the 116th Congress,” wrote the researchers.

Among all 44.6 million Part D enrollees in 2017, nearly 1 in 10 (3.6 million) had drug spending above the catastrophic threshold, with 2.6 million having LIS.

The average $3214 spent among Part D enrollees without LIS who had OOP costs above the catastrophic threshold was more than 6 times the average OOP spending by all enrollees without LIS ($486) and more than 2.5 times the average OOP spending by the 3.9 million enrollees without LIS who had spending in the coverage gap but below the catastrophic threshold ($1200).

The $3214 spent by these enrollees was lower compared with average annual OOP spending before the Affordable Care Act (ACA), noted the researchers.

“With the ACA provisions to phase out the coverage gap taking effect in 2011, average out-of-pocket spending by Part D enrollees who incur high out-of-pocket costs was lower in 2017 than it was in 2010, before the gap coverage phase-out began,” they wrote. “The first-year effect of the ACA changes was a substantial reduction in spending by Part D enrollees who incurred high out-of-pocket drug costs, after increasing every year between 2007 and 2010. But the trend has reversed in recent years.”

After falling to $2870 in 2014, average annual OOP costs increased to $3041 in 2015, $3196 in 2016, and then to $3214 in 2017.

Treatments for autoimmune diseases, hepatitis C, and certain types of cancer were among the top 10 highest-cost medications for the 1 million enrollees, with annual OOP spending per treatment averaging over $5000. Average annual OOP spending was the highest for HP Athcar ($12,030), followed by Harvoni (ledipasvir/sofosbuvir), which had an average annual OOP spending of $5906. Cancer drugs for myelofibrosis, leukemia, and multiple myeloma also topped the list.

In 2017, 10 brand-name drugs accounted for 20% of aggregate OOP spending among these enrollees, with Revlimid alone accounting for 4% of total OOP costs and the top 3 drugs—Revlimid, Lantus Solostar, and Imbruvica—accounting for 8.5%.