Open enrollment is under way for the 2024 Medicare Part D plans. Our exclusive analysis of Center for Medicare & Medicaid Services’ (CMS) data reveals that preferred cost sharing pharmacy networks will maintain their dominance as a component of Part D benefit design.
For 2024: •94% of stand-alone Medicare Part D prescription drug plans (PDP) will have a preferred network. •51% of Medicare Advantage prescription drug (MA-PD) plans will have a preferred network.
Below, I provide historical data on preferred networks’ growth and update the seven top companies’ 2024 offerings. I also update our analysis of the prevalence of preferred networks in three different types of MA-PD plans. In upcoming articles, I’ll delve into chain and independent pharmacies’ participation in the major 2024 preferred networks.
The 2024 data provide early evidence of a shrinking PDP market. Chalk it up to yet another unintended consequence of the Inflation Reduction Act of 2022 (IRA), which will make PDPs less economically viable and drive even more seniors into Medicare Advantage plans.
D IS FOR DATA
A preferred network gives consumers a choice of pharmacy while providing financial incentives to use the pharmacies that offer the payer lower costs or greater control. A consumer with a preferred network benefit design retains the option of using any pharmacy in the network. However, the consumer’s out-of-pocket expenses will be higher at a non-preferred pharmacy.
Preferred network models have grown rapidly within the Medicare Part D program, where CMS calls them preferred cost sharing networks. CMS calls the pharmacies in such networks preferred cost sharing pharmacies.
According to federal regulations, preferred pharmacies in Part D must offer “covered Part D drugs at negotiated prices to Part D enrollees at lower levels of cost sharing than apply at a non-preferred pharmacy under its pharmacy network contract.” (source) Beneficiaries who qualify for the Low-Income Subsidy (LIS) face low out-of-pocket drug costs regardless of a pharmacy’s preferred status.
To identify the 2024 Part D preferred cost sharing pharmacy networks, we used the 2024 Plan Finder Data (September 29, 2023) and the 2024 Landscape Source Files (October 5, 2023) for PDPs and MA plans.
Print Page
Email to a Friend