70% of Medicare beneficiaries enrolled in Part D: KFF

Drugs prescription pad
The number of Medicare Part D enrollees is up almost 50% since 2006. (Getty/LIgorko)

The number of people enrolled in Medicare Part D has doubled since 2006, now totaling 45 million people.

Overall, this means 70% of all Medicare beneficiaries are enrolled in the drug coverage plan, according to the latest research from the Kaiser Family Foundation (KFF).

When Medicare Part D first started in 2006, roughly half of Medicare enrollees were in the program. And for the first time, enrollment in standalone drug plans has decreased while enrollment in Medicare Advantage (MA) drug plans has increased.

"At this rate, I think we’ll see more enrollees in Medicare Advantage drug plans than in standalone drug plans in the next few years," Juliette Cubanski, associate director of the program on Medicare policy at KFF, told FierceHealthcare.


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Looking at the breakdown, 46% of Part D enrollees are in standalone prescription drug plans (PDPs) and 39% are in MA prescription drug plans (MA-PDs). The remaining 15% of Part D enrollees are in employer/union group plans.

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As enrollment in MA continues to grow, so does the enrollment in MA-PDs. Last year, the number of MA-PD enrollees increased 9%, and PDPs fell by 0.3%.

"Part D enrollment continues to grow as overall Medicare enrollment grows, but our numbers suggest a trend towards enrollment in Medicare Advantage plans rather than traditional Medicare supplemented with a standalone drug plan," Cubanski said. "People may be choosing Medicare Advantage for reasons other than the drug coverage these plans offer, but this choice does have implications for access to hospitals and doctors. This is because Medicare Advantage plans typically offer limited networks of providers relative to traditional Medicare, which offers access to any provider that accepts Medicare."

According to the data, the largest number of enrollees in Medicare Part D were covered via three payers: UnitedHealth, Humana and CVS Health. Specifically, 23% were covered by UnitedHealth, 17% were covered by CVS Health and another 17% by Humana.

The report notes that the recent acquisitions of Aetna by CVS Health and Express Scripts by Cigna have further consolidated the process. Specifically, in the past year Cigna has increased its market share from 3% to 8% and CVS Health has increased its share from 14% to 17%.

The same payers, CVS Health, UnitedHealth and Humana, have the most standalone PDP enrollees in 2019, even if enrollment in each decreased slightly from 2018. Nine out of 10 standalone enrollees are sponsored by CVS Health, UnitedHealth, Humana, WellCare or Cigna. WellCare and Cigna gained PDP enrollees in part due to their acquisitions.

Based on enrollment, the average monthly premium for standalone PDPs decreased by 4%, the first decrease in several years. The average monthly PDP premium has remained within a few dollars of $49.63 since 2010. The overall Part D premium is lower than the average for standalone PDPs due in part to the ability of MA-PD sponsored plans to use rebate dollars from Medicare payments to lower premiums.

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The national average for a PDP premium is $40 a month in 2019. Most monthly premiums for the top 10 PDPs are actually below this average. The bottom of the range was $17 per month for Aetna Medicare Rx Select, and the top of the range was $76 per month for Humana Enhanced and AARP MedicareRx Preferred.

When it comes to out-of-pocket costs, most Part D enrollees have low costs for preferred drugs but higher costs for generics not on the preferred list. In fact, one-fourth of Part D enrollees pay no money for preferred generics, but many pay $10 or more for those not on the preferred tier.

For non-preferred drugs, virtually all PDP enrollees pay coinsurance between 24% and 50% in 2019, while most MA-PD enrollees (79%) pay copayments between $90 and $100. For preferred brands, nearly two-thirds of PDP enrollees (64%) pay copayments less than $45 in 2019, while roughly the same share of MA-PD enrollees (68%) pay $45 to $47.

In addition, 13 million Part D enrollees receive cost-sharing assistance through the Part D Low-Income Subsidy (LIS) program. Reflecting overall trends in Part D enrollment, the share of LIS enrollees in standalone PDPs has declined over time, from 87% in 2006 to 57% in 2019, while the share in MA-PDs has increased from 13% to 39%.

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Thus far in 2019, 1 million LIS beneficiaries pay a premium for Part D coverage, even though they may be able to obtain coverage without a premium through a benchmark PDP. On average, these 1 million LIS beneficiaries are paying about $24 a month for premiums.

Looking forward, Cubanski says there are several drug pricing proposals in the works that could affect Part D for 2020 and beyond. One key proposal she noted to watch out for is the Trump administration’s proposed rule to ban rebates in Part D between drug companies and plan sponsors. According to government estimates, this would affect both Medicare spending and beneficiary costs for Part D coverage.

"Plans that are gearing up to participate in the Part D market in 2020 may face a very different landscape for negotiating drug prices for 2020 and beyond that could affect their formulary coverage decisions and premium pricing strategies, which would then affect beneficiaries in terms of Part D coverage and costs," Cubanski added.