The U.S. Department of Health and Human Services (HHS) analyzed Medicare Part D data to determine the out-of-pocket expenses for prescription drugs in 12 states. In 2022, Medicare Part D beneficiaries with higher incomes spent an average of $464 on medications. HHS aims to use this data to assess the impact of federal provisions on drug costs. During the catastrophic benefits phase, 1.5 million enrollees incurred an average of $3,093 in out-of-pocket expenses for prescription drugs.
Health insurance bills not covered by Medicare can chip away at the income of retired clients. Medicare programs, including Medicare Part D, believe in the concept of “skin in the game,” where patients contribute a portion of their medical expenses to help control overall spending.
According to a recent analysis from the Office of the Assistant Secretary for Planning and Evaluation at the U.S. Department of Health and Human Services, in 2022, Medicare Part D beneficiaries who exceeded the income threshold for additional government subsidies had an average out-of-pocket expense of $464 for prescription drugs.
To explore the 12 states where Medicare drug plan enrollees, who are not considered low-income, incurred the highest out-of-pocket expenses for medications, refer to the gallery above.
Implications
The government has made available free, public-domain data that can assist in helping clients plan for their out-of-pocket healthcare costs.
Background
The U.S. Department of Health and Human Services (HHS) is the federal agency responsible for overseeing the Centers for Medicare and Medicaid Services.
HHS is currently implementing provisions from the federal Inflation Reduction Act, which include measures to allow Medicare program administrators to negotiate with drug manufacturers for better prices.
The out-of-pocket drug spending report prepared by HHS aims to demonstrate the potential impact of the act’s provisions on Medicare enrollees’ expenses in each state.
Data Insights
The new HHS report on Medicare Part D provides comprehensive data on the usage and benefits of Part D coverage.
A Part D plan comprises four coverage phases, with one phase designated for enrollees with significantly high prescription drug expenses, known as the catastrophic benefits phase.
During this phase, the Part D plan covers all expenses, but the enrollee is responsible for paying 5% of the total cost.
In 2022, approximately 1.5 million out of the 38 million non-low-income Part D enrollees reached the catastrophic benefits phase. On average, they incurred $3,093 in out-of-pocket expenses for prescription drugs, as reported by HHS analysts.