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Since 2006, Medicare has provided beneficiaries with a wide range of private plan options to obtain their part D prescription drug benefit-with more than 26 million beneficiaries now enrolled in a Medicare drug plan. Delivered entirely by private companies through both stand-alone prescription drug plans (or PDPs) and Medicare Advantage plans, the Medicare drug benefit is often held up as a market-based model for providing government-subsidized coverage.


For many beneficiaries enrolled in part D plans, however, the coverage provided by Medicare's private drug plans has eroded as premiums, and cost-sharing requirements have increased over time, with shrinking options for low-income beneficiaries, according to new trend analysis from the Kaiser Family Foundation. The analysis from a new summary of the Foundation's 2009 Medicare Part D Data Spotlights series reveals a pattern of beneficiaries paying more for less over time, on average:


* Premiums. Between 2006 and 2009, the weighted average premium paid by beneficiaries for stand-alone part D coverage has increased by 35%, from $25.93 per month in 2006 to $35.09 in 2009. Between 2008 and 2009 alone, the average enrollee paid 17% more in premiums-the largest 1-year premium increase to date.


* Cost sharing. Since 2006, the median cost sharing for a 30-day supply of "nonpreferred" brand-name drugs in stand-alone PDPs has increased by 35%, from $55 to $74.75, while cost sharing for "preferred" brand drugs increased by 32%, from $28 to $37. Cost sharing for generic drugs in PDPs has remained fairly stable.


* Specialty tier. In 2009, 87% of PDP enrollees and 98% of Medicare Advantage enrollees are in a plan with a specialty tier (up from 82% and 69%, respectively, in 2006). The majority of part D plans with specialty tiers currently charge 33% coinsurance for these drugs; in contrast, relatively few plans charged more than 25% coinsurance for specialty-tier drugs in 2006.


* Coverage gap. In 2009, as in 2006, most part D plans offer little or no coverage in the so-called "doughnut hole," where enrollees pay 100% of total drug costs before catastrophic coverage begins. Since 2006, the share of plans offering coverage of mostly generic drugs in the gap has increased, while full coverage of brand-name drugs in the gap has virtually disappeared.


* Utilization management. While the share of drugs covered by plans has changed little in recent years, plans are increasingly placing utilization management restrictions on their use. In 2009, 28% of brand-name drugs have such restrictions, up from 18% in 2007. These restrictions include requiring step therapy, prior authorization, or a limit on the quantity covered.


* Plans available to low-income beneficiaries. In 2009, fewer plans are available without a premium to low-income beneficiaries eligible for additional subsidies than in any previous year. As a result, more than 1.6 million low-income subsidy recipients were assigned to new part D plans, and another 2 million who remained in their same plan between 2008 and 2009 are now paying premiums for their drug coverage.



These findings are included in the Foundation's 2009 Medicare Part D Data Spotlight Summary, released today along with new spotlights on specialty tiers and the 10 most commonly prescribed drugs for Medicare beneficiaries. Earlier spotlights examined premiums, gap coverage, and low-income subsidy plans.


All of the spotlights were prepared by a team of researchers at Georgetown University, NORC, and the Kaiser Family Foundation and are available online at