Average Medicare Part D premiums are set to decrease for the third year in a row, the Trump administration announced Tuesday.
The Centers for Medicare & Medicaid Services (CMS) projected premiums for 2020 to be an average of $30, a decline of 13% from $34.70 in 2017. That decrease saves beneficiaries $1.9 billion in premium costs, the agency said.
Part D enrollment has increased in tandem, according to CMS, and is up 12.2% since 2017. Trump administration officials touted steps taken under President Donald Trump to reduce costs as key to these figures.
“Medicare Part D plans continue to be extremely popular, and the president is delivering improvements to Part D, offering plans more ways to provide low-cost options and delivering patients more transparency on drug prices,” Department of Health and Human Services (HHS) Secretary Alex Azar said in a statement.
Over the past three years, average #Medicare Part D basic premiums have decreased by 13.5%, from $34.70 in 2017 to a projected $30 in 2020. https://t.co/RABerA4s1Y #StrengtheningMedicare pic.twitter.com/Flp2gwhdDG
— Administrator Seema Verma (@SeemaCMS) July 30, 2019
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CMS noted several steps it has taken with the goal of driving down Part D costs, including:
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Eliminating the so-called pharmacy “gag clause,” which prohibited pharmacists from providing information about lower-cost alternatives outside their insurance coverage
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Cutting down the maximum amount that Part D beneficiaries pay for biosimilar products
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Removing requirements that Part D plans must be “meaningfully” different from one another, allowing more plans to come to market
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Mandating that beneficiaries’ explanation of benefits documents include price increases and offer lower-cost therapeutic alternatives
Drug price reform has been a cornerstone of the Trump White House’s healthcare agenda, though HHS has run into trouble with some of its most headline-grabbing changes: namely, forcing drug companies to include list prices in advertisements and eliminating legal protections for drug rebates negotiated by pharmacy benefit managers.
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The rule on TV advertisements was spiked by a federal judge, and HHS pulled the rebate rule amid trepidation from the president that it could lead to premium hikes in Part D.
CMS Administrator Seema Verma said in a statement that seeing several years of premium declines is the fruit of this labor.
“Part D plans are having to prove their value to beneficiaries—the actions that CMS has taken to strengthen the Medicare prescription drug program are working to drive down costs for seniors,” Verma said.