PDP's flocked to Stabilization Demo

[Duaine]

PDPs flocked to stabilization demo

• In a fact sheet accompanying the release of the so-called landscape files for 2025, CMS estimated that the average monthly premium for MA plans, including those with prescription drug coverage, will drop from $18.23 in 2024 to $17.00 in 2025.
• CMS’s Center for Medicare Director Meena Seshamani, M.D., said the landscape files suggest “ample, affordable choice” in both MA and Part D, and that “benefits will remain stable, including…supplemental benefit offerings such as hearing, dental and vision.” To finance such benefits, plans that bid below the benchmark will receive an average of $210 per member per month (PMPM), CMS estimated. That’s compared with the average rebate amount of $209 PMPM for 2024.
• Despite increasing liability in the catastrophic coverage phase and other Part D changes brought on by the Inflation Reduction Act, early indicators point to a stable Part D market. That’s in large part due to the Part D Premium Stabilization
  Demonstration. Under the demonstration program, CMS will apply a $15 reduction to the base beneficiary premium, place a $35 limit on any plan-specific year-over-year premium increase for participating stand-alone Prescription Drug Plans (PDPs), and adjust risk corridors to provide for greater government risk sharing for potential losses.
• It appears most PDPs took CMS up on that opportunity. Officials said 782 out of 818 stand-alone PDPs will participate in the demo next year. The total projected Part D premium will decline by $7.45 to $46.50 next year, and the average PDP premium will drop by $1.63 to $40.00, CMS estimated. 

Full IRA impact remains to be seen

• There are 48 stand-alone PDP plan benefit packages (PBPs) with a $0 premium, up from 14 such plans in 2024, observes Brooks Conway, principal with actuarial and consulting firm Oliver Wyman. Similar to this year, most of those are Wellcare PDPs offered by Centene Corp. It’s worth noting that in 2023, there were no stand-alone Part D plans with $0 premiums, he says.
• In MA, meanwhile, it’s clear that select organizations, such as CVS Health/Aetna’s Silverscript and UnitedHealth Group, “dropped one or more of their options completely from the PDP market,” David Mike, founder and managing principal of boutique consulting firm Veratrix Solutions, tells AIS Health. “That is likely because it’s very difficult to differentiate benefits in this new post-IRA environment — in Part D, in particular. And I do think the additional cost pressures driven by IRA in Part D are leading to the reduced benefits and reduced overall offerings in the MA space. But there are puts and takes in MA. It’s not a cohesive, consistent story other than benefit reductions on the MA side but a legislated benefit enhancement on Part D.”