Preview of Medicare Part C and Part D for 2014

The actuaries at the Centers for Medicare & Medicaid Services (CMS) must have been burning their midnight oil, because they have already laid the foundation for Medicare Advantage (managed care) plans and Part D prescription drug plans for 2014. The good news for beneficiaries is that it looks like they have taken action to control increases in premiums for Medicare Advantage plans, and beneficiaries in Part D will see a lower deductibles and co-payments for drugs.


Part of the reason for this is in 2014 Part C and Part D plans will have to adhere to the Affordable Care Act provision to maintain a medical loss ratio of 85%, that is, they must spend 85% of revenue on clinical services, prescription drugs, quality improvements, etc.

And Part D will also improve for those beneficiaries who fall into the donut hole, as not only will manufacturers have to discount brand name drugs by 52.5%, as they do in 2013, but the program will discount generic drugs by 28%, up from the 21% in effect this year.

As 2014 is a long way off, there is no use to going into great detail about this at this point in time, and we will know more particulars as the year progresses and plans submit their specific offerings to CMS. But one interesting trend is that there will be more emphasis on quality of care. For one, Medicare will be refining its Part D Medication Therapy Management (MTM) program and tying it into the Million Hearts initiative to improve access and adherence to anti-hypertensive medications. It will also encourage beneficiaries to tie their medication reviews into their annual wellness visits to their physicians. And, interestingly, the Part D program has been in place for a long enough time that it is producing data on how Medicare beneficiaries are medicated. For example, it now has data on the use of anti-psychotic medications in the long-term care setting, and will begin using this to deal with the longstanding quality of care issue of the overuse of these drugs in this setting.

So stay tuned, and as we approach the annual enrollment period in the Fall (it always starts October 15), I’ll blog more about what beneficiaries should be looking for and what action they should take to ensure they are in the best plans for their circumstances in 2014.