2014 Medicare Drug Plans Vary Widely in Availability of Drugs and Restrictions on Their Use

A new analysis from HealthPocket of recently released data on Medicare drug plans reveals that as compared to 2013, slightly more drugs will be available on average under Medicare standalone prescription drug plans (PDPs) and fewer on average will be available under the Medicare Advantage prescription drug benefit (MAPD). The variation in the number of available drugs is significant: MAPD plans range from 956 to 2334, and PDP plans range from 995 to 2333. On average, MAPD plans will include 1492 drugs on plan formularies, and PDP plans will include 1456.

An estimated 90 percent of Medicare enrollees have some form of drug benefit, affecting about 45 million Americans. As is true in the private health insurance market, each Medicare plan has a “formulary” that lists out which drugs are covered and what out-of- pocket costs a consumer is responsible for in a given year for those medications. If a consumer is on a drug that does not appear on the plan formulary, he or she will have to pay the full cost. Yet even if a drug is on the formulary, plans can restrict access to it through various mechanisms, including limiting the quantity; requiring prior authorization; and mandating a step therapy process for certain medications.

MAPD plans in 2014 will carry quantity limits on 0 to 32 percent of drugs, prior authorization on 3 to 37 percent and step therapy on 0 to 11 percent. PDP plans will have quantity limits on 1 to 31 percent of drugs, prior authorization on 7 to 32 percent and step therapy on 0 to 9 percent. Kaiser’s MAPD plan offers a high number of drugs, with 2320 drugs on its formulary, approaching the industry maximum of 2333. None of the drugs on its formulary carries quantity limits or step therapy restrictions, and prior authorization is required for only 3 percent of all drugs offered.

“The lesson here for Medicare patients is that they really need to do their homework during open enrollment season to figure out which plans give them the best deal,” said Steve Zaleznick, executive director for Consumer Strategy and Development at HealthPocket. “The most important question for consumers is if the drugs they take are on the plan’s formulary, and the next is what hoops they may have to jump through to actually get the drugs in hand.”

This HealthPocket InfoStat is part of a series using health plan data to produce unbiased market analysis and guidance for consumers navigating America’s changing health insurance environment. Consumers can review Medicare plan options for free using HealthPocket’s Medicare comparison tool.