Low-cost standalone prescription drug plans for Medicare Part D have been growing in market share, accounting for 16 percent of drug plans, according to an analysis of federal data by Avalere Health.
The Centers for Medicare & Medicaid Services recently released data on Medicare Advantage and Part D plan participation, premiums and benefit designs, and by the initial looks of it, to analysts at Avalere, 2014 is likely to see "the continued emergence of low-cost PDPs with preferred pharmacy networks offering value-priced options to enrollees."
In recent years, most Medicare beneficiaries choose Part D plans with national sponsors and with lower-premiums and limited networks, which ended up benefiting both cost management and enrollment for the plans, according to Avalere.
In 2013, four Part D plans with national sponsors had monthly premiums below $30, and many came with co-branding by insurers and retailers or other organizations seniors frequent and trust: Humana's Walmart Preferred PDP, Coventry's First Health Part D Value Plus PDP, UnitedHealth's AARP MedicareRx Saver Plus PDP, and CVS Caremark's SilverScript Choice PDP.
Humana and Walmart's plan had the largest enrollment pools for 2013, 1.8 million seniors, with average monthly premiums of $18.50, followed by Coventry's (now Aetna's) First Health, with 713,000 seniors and average premiums of $29.50, according to Avalere Health's analysis.
UnitedHealth and AARP's plan had 692,000 enrolled in 2013, with the lowest average premiums, at $15, followed by CVS Caremark's enrollment of 340,000 and a plan priced at $29.10.
Medicare Advantage plans, meanwhile, are likely to face some financial pressures in 2014 stemming from the health insurer fee and risk adjustment changes.
Although Medicare Advantage avoided some proposed reductions by CMS, Avalere Health expects that the risk adjustment changes will bring payment reductions that are likely to disproportionately impact Medicare Advantage Special Needs Plans, for beneficiaries with chronic and other special medical conditions.