As summer eases into fall, policymakers are discussing ways to ease Medicare patients’ cost-sharing pain.
Dubbed out-of-pocket “smoothing,” one new concept would allow Medicare Part D beneficiaries to take a payment plan approach to their prescription drug costs, spreading the expense evenly across the year. Smoothing aims to lessen the financial hardship for patients who face the prospect of paying a full year’s deductible in a single month.
These are typically patients who take innovative, expensive medications, patients whose out-of-pocket expenses would fulfill their annual deductible within the first month, or couple of months, of a new year. This might include patients with chronic diseases such as cancer, hepatitis C or arthritis, for example. The same is true for those who take several medications to manage multiple chronic conditions, as the majority of Medicare beneficiaries do.
Once a patient meets his or her annual deductible, insurance kicks in. After that, patients are typically responsible for a modest amount for each medication, called a co-pay. This approach is fine – if you have several thousand dollars at the ready for that initial bill.
But for seniors on modest or fixed incomes, paying the entire deductible amount at once can create a financial conundrum. They can dedicate their monthly budget – and possibly also savings – to cover the deductible, putting other bills on hold. Or they can forego their medication until they’ve saved enough to afford the out-of-pocket costs.
“Smoothing,” therefore, has two obvious benefits. First, it will help Medicare beneficiaries pay over time. This can reduce financial worry and keep them from having to choose between medicine and other expenses such as utilities and food.
Second, it could help with medication adherence. Current Medicare patients who can’t pay their entire deductible at once may simply abandon their medication. Or not take it as they should. Inability to pay is a leading reason patients abandon their prescription or delay treatment. And medication non-adherence can lead to other medical complications – each with their own costs.
Patient advocates expect lawmakers to introduce “smoothing” legislation in the coming weeks. It is one of several approaches being considered that would help ease the cost-sharing burden that Medicare beneficiaries face.