Medicare Part D Patients with HIV May See Lower Drug Costs Under IRA
Medicare Part D beneficiaries with HIV will benefit from the out-of-pocket healthcare spending cap and the expansion of low-income subsidy coverage.
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- The Inflation Reduction Act’s Medicare Part D redesign may improve affordability for beneficiaries with HIV, but stakeholders will need to take steps to ensure beneficiaries get the most out of these cost breaks, an Avalere analysis found.
“The IRA’s Part D redesign provisions aim to reduce affordability challenges and may significantly affect PWH,” the analysis stated. “HIV stakeholders hope that addressing affordability challenges could increase access to antiretrovirals and potentially improve antiretroviral adherence.”
The law, which passed in August 2022 with many major payers’ support, implemented a few changes to out-of-pocket healthcare spending policies and the Medicare Prescription Payment Program (MPPP) that could impact costs for patients with HIV.
An out-of-pocket healthcare spending cap in the catastrophic phase, which goes into effect in 2024, may reduce prescription drug spending for beneficiaries with HIV. The cap for out-of-pocket healthcare spending and the catastrophic threshold will be $2,000 starting in 2025. HIV drugs often exceed this threshold in annual costs.
Additionally, patients can opt into MPPP to lower their costs. This program allows patients to spread out payments for their out-of-pocket costs across a plan year. Patients with HIV who find their HIV prescription drug spending is concentrated at the beginning of the year may benefit from the ability to cover their prescriptions at a more manageable cadence, reaching up to $2,000 across the plan year.
The Inflation Reduction Act may also impact the low-income subsidy’s structure. Beneficiaries with partial low-income subsidy benefits will now have access to the full benefits, which means that low-income beneficiaries with HIV who formerly received partial benefits may now have access to lower cost-sharing during the initial coverage period. They will also have no deductible.
In 2025, plans will pay 60 percent of the costs in the catastrophic phase instead of the 15 percent they originally paid for partial benefit low-income subsidy beneficiaries. Plans will pay 65 percent in the initial coverage period instead of 75 percent for partial benefit low-income subsidy beneficiaries.
Meanwhile, in the catastrophic phase, the government will pay 20 percent, and the manufacturer will pay the remaining 20 percent for partial benefit low-income beneficiaries in 2025.
Part D plans must inform beneficiaries about MPPP and the LIS expansion. Avalere consultants recommended that providers alert their patients with HIV about these changes so that beneficiaries can take advantage of them. HIV care providers and case managers can reinforce these patient education efforts.
However, the law’s impact may vary over time and in different settings, requiring providers to reassess their Medicare beneficiary population size and payer mix. Avalere consultants also advised evaluating how to measure the law’s effects on beneficiaries.
