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Proposed ‘Flat Copayment Policy’ Will Save Medicare Part D Beneficiaries Money at the Pharmacy Counter

Published November 14, 2022

Recent studies illustrate that growing out-of-pocket costs for prescription drugs harm people’s health and result in reduced medication compliance. Lack of medication adherence can lead to deteriorating health and an increased incidence of costly hospitalizations.

Under a new flat copay model proposal, the maximum flat copay for Medicare Part D beneficiaries could be capped at $35 for all covered drugs. Currently, this benefit is only available to those receiving diabetes drugs.

A new analysis by Avalere Health outlines how a proposed limit to out-of-pocket costs for drugs covered by Medicare would positively impact beneficiaries. This executive summary by Alliance staff gives an overview of this proposal.

Two older adults at the pharmacy counter with thought bubbles above them detailing how much money a flat copayment model for Medicare Part D would save them.

The CMS Innovation Center previously tested a $35 monthly copayment for insulin in the Medicare program, which was recently codified in the Inflation Reduction Act. The new analysis shows that the addition of a flat copayment policy for all Part D drugs could result in significant savings for patients. The need for additional policies to support patient affordability was reinforced by the White House’s October 14, 2022, Executive Order on Lowering Prescription Drug Costs for Americans, which asked the CMS Innovation Center to submit recommendations for additional models to lower patients’ drug costs no later than January 12, 2023.

Under the Inflation Reduction Act of 2022, all Medicare Part D enrollees will benefit from an out-of-pocket cap starting in 2025. Adding a copayment cap policy to the IRA Part D redesign can further reduce costs for beneficiaries.


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