Amy Niles, PAN Foundation

In just a few weeks, open enrollment begins for the more than 63 million people enrolled in Medicare programs in the US. During this time, many will evaluate and select a Part D plan that best meets their health needs. It is also a time when those enrolled in Medicare will learn more about two important changes to the Medicare Part D program taking effect Jan. 1, 2025:

 People enrolled in Part D plans (both traditional and Medicare Advantage) will not pay more than $2,000 in 2025 in out-of-pocket (OOP) costs for their prescription medications.

Medicare prescription payment plan (now commonly referred to as M3P). 

Plans will offer enrollees the opportunity to opt-in to an interest-free payment plan allowing them to pay OOP drug costs monthly.

Recently, several colleagues and patient advocates have reached out to me asking questions about these reforms and their impact on patient assistance foundations, such the PAN Foundation. Ahead are some of those questions, along with my responses and perspective.

How will the Part D cap impact Medicare beneficiaries’ need to receive patient assistance from charitable foundations?

Medicare beneficiaries will continue to need patient assistance from charitable foundations, even with the Part D cap of $2,000 in place come 2025. Because those with federal insurance, such as Medicare, cannot benefit from pharma company assistance, the assistance provided by charitable foundations will continue to serve as an important, if not critical, safety net for many people on Medicare. Without this safety net, thousands of individuals living with serious illness would have no place to turn for assistance, and many would likely abandon treatment.

Recent in-depth research by Avalere and our own national polling from the PAN Foundation’s Center for Patient Research found that despite the new reforms leading to more patients being able to start and stay on their prescription drugs, many people will continue to face affordability challenges. This is especially true among those within certain therapeutic areas—such as autoimmune conditions, multiple sclerosis, and HIV—and the most marginalized and underserved communities (e.g., lower-income, Black, and Native American patients). In fact, Avalere projects that more than 2.6 million adults enrolled in Medicare Part D will have OOP spending high enough to reach the new $2,000 annual cap when it comes into effect in 2025.

And when looking at beneficiaries within only eight key therapeutic areas, Avalere projects anywhere from about 182,000 to 410,000 people will likely spend more than 10% of their estimated annual income on OOP costs for prescription medications each year.

 This leaves them effectively underinsured and at increased risk of delaying or forgoing treatment.

Doesn’t the $2,000 Medicare Part D cap make OOP prescription drugs affordable for everyone?

For some, perhaps. But for most people seeking assistance from charitable foundations, many of whom are living on fixed incomes between 150% and 300% of the federal poverty level and living with serious illnesses, the answer is no.

Our national polling found about 75% of adults said it would be difficult to afford $2,000 in OOP prescription costs each year.

 Affordability concerns were especially high among Black and Hispanic adults, adults with incomes under $50,000, and adults with chronic or rare diseases.

In addition, for the more than 50 million adults enrolled in Medicare Part D, their OOP Rx costs are just one part of their overall cost of care. This doesn’t account for their other healthcare costs (e.g., insurance premiums, doctors’ office copays, lab tests, etc.) or living expenses, such as housing/rent, food, utilities, clothing, or transportation. In fact, about 60% of respondents whose current prescription drug costs don’t exceed $2,000 said they would cut back on food-related expenses if they were faced with that total, while others reported they would cut back on utilities or other medical expenses.

Is the  M3P a good payment option for all beneficiaries enrolled in Medicare Part D plans?

When M3P goes into effect in 2025, ultimately, it will be up to the Medicare beneficiary to decide if this payment option is best for them. Someone enrolled in Medicare Part D should consider opting into the program if they:

Have difficulty paying for their OOP drug costs all at once.

Have experienced more than $2,000 in OOP drug costs in the prior year.

Have experienced a single prescription cost of at least $600.

Want to budget and spread their OOP drug costs throughout the year.

Are not eligible for financial assistance from programs such as the Extra Help Program, State Pharmaceutical Assistance Programs, Medicare Savings Programs, AIDS Drug Assistance Program, or charitable assistance foundations, like the PAN Foundation.

As the Medicare program undergoes significant transformation for the first time in many years, what do donors to charitable foundations need to know?

The generosity of donors makes it possible for charitable foundations to provide financial assistance directly to patients. This financial assistance is often the difference between being able to receive treatment, or not—especially for those living with life-threatening, chronic, or rare diseases.

It’s clear that while these reforms are an important step in the right direction, many will continue to struggle. And since individuals enrolled in Medicare Part D, and other federally funded insurance programs, are unable to use manufacturer assistance, they must rely on organizations such as the PAN Foundation to serve as a safety net when they can’t afford their medications.

Sustained funding to foundations in 2025 and beyond will provide continuity of care for people who have relied on foundation support for years. And it will continue to minimize disparities in access to care while helping us serve even more people who need our help.

Amy Niles is chief mission officer at PAN Foundation.

1. Despite Historic Medicare Reforms, Charitable Assistance Programs Still Critical for Many. PAN Foundation

https://www.panfoundation.org/despite-historic-medicare-reforms-charitable-assistance-programs-still-critical-for-many/

2. New Analysis: Medicare Reforms Will Lead to Continued Affordability Challenges, Despite Increased Medication Uptake and Adherence. PAN Foundation

https://www.panfoundation.org/new-analysis-medicare-reforms-will-lead-to-continued-affordability-challenges/

3. National Poll: Many Adults will Struggle to Afford Medications Even with Medicare Reforms. PAN Foundation

https://www.panfoundation.org/national-poll-many-adults-will-struggle-to-afford-medications-even-with-medicare-reforms/

Articles

Will the looming changes address the concerns of the patient assistance community?

Looking Ahead to Medicare Reforms Coming in 2025

Millions of people enrolled in Medicare have benefited from the telehealth flexibilities that were granted during the COVID-19 pandemic, and, subsequently, extended in 2022. However, without Congressional action, these flexibilities will end on Dec. 31, 2024—impacting access and leading to further health inequities.

Telehealth flexibilities have played a critical role in expanding access to care and maintaining continuity of care, especially those living in rural communities and underserved areas. For individuals requiring access to advanced specialists, mental health providers, and those with mobility issues or lack of transportation, telehealth flexibilities have served as a much-needed lifeline to care.

According to a national poll conducted by the PAN Foundation’s Center for Patient Research,

 nearly one-third of adults who use telehealth services say they do so to refill their prescriptions (30%), to address less serious health issues (28%), and for mental health support (28%). Clinicians have used telehealth to expand access to care for patients and to support strong patient relationships, and they value the flexibility created by the option for remote care when clinically appropriate. Important safety-net providers such as community health centers and rural health clinics have depended on these flexibilities, as have clinicians such as physical, speech, and occupational therapists to extend access to patients.

Over the past couple of years, several bills to permanently extend telehealth flexibilities for people enrolled in Medicare have been introduced with bipartisan support. This includes the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act of 2023 (H.R. 4189), introduced by Rep. Mike Thompson (D-CA). While there are similarities between various telehealth bills, it is important that a final telehealth bill that is passed and permanently extends flexibilities includes the following:

Expands patient access to telehealth services by removing geographic and originating site limitations to enable patients to communicate remotely with their providers, regardless of location.

Removes distant site provider list restrictions to allow all Medicare providers who deliver telehealth-appropriate. services to provide those through telehealth. Providers would include physical and occupational therapists, speech-language pathologists, and social workers.

Ensures that federally qualified health centers, critical access hospitals, and rural health clinics can furnish telehealth in Medicare and be reimbursed fairly for those services.

Removes in-person requirements under Medicare for mental health services furnished through telehealth and telecommunications technology.

Allows the Centers for Medicare & Medicaid Services to cover audio-only telehealth services where necessary to bridge gaps in access to care. Audio-only telehealth visits should continue to be an option for patients who lack access to the resources needed to participate in video-based telehealth.

Allows employers to offer telehealth benefits for seasonal and part-time workers. Increasing access to some telehealth benefits for part-time employees, seasonal workers, interns, new employees in a waiting period can be a meaningful way to support workers—as long as this access supplements health insurance purchased by that individual or a family member.

Drives better and more coordinated care for those with chronic disease by ensuring adequate reimbursement for remote patient monitoring technology.

Since the pandemic, patient and provider groups have advocated for legislation that recognizes the value of telehealth services for Medicare beneficiaries. Congress must not wait until the end of the year to pass legislation that already has bipartisan support. We at PAN urge Congress to act now

 to pass telehealth legislation that will positively impact millions of people in the US and their healthcare journeys.

1. Nearly Half of Adults Who Use Telehealth Face Barriers to Accessing Services. PAN Foundation. April 17, 2024. 

https://www.panfoundation.org/nearly-half-of-adults-who-use-telehealth-face-barriers-to-accessing-services/

2. Urge Congress to Expand Telehealth Flexibilities Before it’s too Late! PAN Foundation. 

https://www.votervoice.net/PANFoundation/Campaigns/114714/Respond

If Congress doesn't act soon, it could result in more health inequities.


The Need to Make Telehealth Flexibilities Permanent

Step therapy, also known as “fail first,” is a tool used by health plans to control spending on patients’ medications. And while it can be an important tool to contain the costs of prescription drugs, in some circumstances, it has negative impacts on the patients themselves. This includes delayed access to the most effective treatment, severe side effects, and irreversible disease progression.

Currently, when a physician prescribes a particular drug treatment for a patient, the patient’s insurance company may require them to try different medications and treatments, and “fail first” on those before they can access the drug originally prescribed by their physician. This protocol is known as step therapy and may ignore a patient’s unique circumstances and medical history. That means patients may have to use drugs that previously failed to address their medical issue, or—due to their unique conditions—could have dangerous side effects.

A recent national poll from the PAN Foundation finds that most adults (55%) who have been required to “fail first” say the policy delayed their access to the medication their healthcare provider (HCP) originally prescribed by up to 11 weeks. Other findings include:

1 in 6 (16%) adults say their HCP has required them to “fail first” before authorizing drugs prescribed by their HCP.

The majority (59%) of adults who have been required to “fail first” say they appealed their health insurance provider’s request.

1 in 5 adults who were required to “fail first” say they had to visit the emergency room (21%) or be admitted to the hospital (20%) because of the policy.

These polling results reinforce the fact that step therapy harms patients by delaying care. Because when patients are prescribed medication by their provider, they shouldn’t have to wait weeks or months to access that treatment.

Current policy landscape and call to action

While most states in the US have passed laws that address problems with step therapy, federal legislation is still needed. This will help create more transparency and ensure that more patients are protected, including those with employer-based health insurance plans regulated by the US Department of Labor.

That’s why it’s time for Congress to pass the Safe Step Act, a bill that would amend the Employee Retirement Income Security Act (ERISA) to require an exception process for any medication step therapy protocol within a group health plan. More specifically, the bill would require insurers to implement a clear and transparent exemption process for a patient or physician to request an exception to a step therapy protocol, while calling for a group health plan to respond to an exemption request within 72 hours in all circumstances, and 24 hours if the patient’s life is at risk.

The bill would also require a group health plan to grant an exemption if an application clearly demonstrates any of the following five exception situations:

The patient has already tried and failed on the required drug.

The required drug is reasonably expected to be ineffective, and a delay of effective treatment would lead to severe or irreversible consequences.

The required drug will cause harm to the patient, meaning the treatment is contraindicated or has caused/is likely to cause an adverse reaction.

The required drug will prevent a patient from working or fulfilling “activities of daily living.”

The patient is stable on their current medication, which has been covered by their previous or current insurance plan.

The Safe Step Act is supported by hundreds of patient advocacy organizations and healthcare provider associations and has strong bipartisan support. In my opinion, it is a common-sense, patient-centric legislation that will safeguard patients from potential adverse medication consequences and ensure access to the treatment that is best for them. Let’s urge Congress to get this bill across the finish line and make it easier for patients to access the healthcare they need and deserve.

Patients should not have to wait to access the medication they need.

Fail-First Policies Are Harming Patients

As a result of the Inflation Reduction Act (IRA), 2024 brings much needed change to the Medicare Part D benefit—helping to lower out-of-pocket (OOP) costs for prescription medications for many. One important change is the removal of the 5% catastrophic cost-sharing obligation, which went into effect Jan. 1. This means, for the first time, Medicare Part D beneficiaries will no longer have unlimited financial liability for their OOP prescription drug costs through the catastrophic phase. Instead, these beneficiaries now face a cap of about $3,250 in OOP costs for their drugs, which is especially beneficial for those who need access to expensive treatments.

While this change improves affordability for many, the new reform with the biggest potential to help low-income beneficiaries is the expansion of the federal Low-Income Subsidy, or "Extra Help," program. This reform, which also went into effect Jan. 1, means that more patients who struggle to afford the healthcare costs related to their Rx drugs will benefit.

Run by the Social Security Administration (SSA), the Medicare Extra Help program helps those enrolled in Medicare Part D who have very limited income and assets to pay for the monthly premiums, annual deductibles, and copays related to their Rx medications.

Historically, there have been two programs within Extra Help—the full and partial programs, each based on income levels. The change enacted into law through the IRA means that the partial program no longer exists; individuals with income up to 150% of the federal poverty level with limited resources may now be eligible for full benefits under the program.

People who qualify for Extra Help will not pay deductibles; premiums for Part D drug plans; any more than $11.20 in 2024 for each brand-name drug the plan covers ($4.50 for generic medications); and a Part D late enrollment penalty, if applicable.

The benefit to each person in this program can be significant—valued at more than $5,000 per year.

Some individuals, such as dual-eligible (enrolled in Medicare and Medicaid); people receiving supplemental security income (SSI); and individuals qualifying for a Medicare savings program are automatically enrolled in the Extra Help program.

Others must meet strict eligibility requirements. Overall, in order to be eligible for Extra Help one must meet the income and resources limit, and live in one of the 50 states or the District of Columbia. For example, a person may be eligible if their combined savings, investments, and real estate are not worth more than $34,360, if married and living with a spouse, or $17,220 if not currently married or living with a spouse. With regard to assets, the SSA will review one’s checking and savings accounts, real estate beyond one’s primary home, and disbursements from retirement accounts, stocks, and bonds.

Individuals who believe they may be eligible can contact the SSA online at 

A recent national poll conducted by the PAN Foundation found that most US adults have either never heard of the Extra Help program or don’t know what it is. Key findings include:

Overall, 44% of respondents have never heard of Extra Help. Nearly half who have incomes under $50,000 (47%) have also never heard of the program.

25% have heard of Extra Help but don't know what it actually is.

33% don’t know which agency administers the program.

59% are not aware of what income eligibility level it expanded to in 2024.

These findings reinforce that additional education and outreach is needed.

Today, almost one in three Part D enrollees, or more than 13 million people, receive Extra Help. However, it is estimated that at least three million more people may be eligible.

Healthcare providers, financial navigators, case workers, community-based organizations, and patient groups have an obligation to do all we can to elevate awareness about this important resource. 

Amy Niles is chief advocacy and engagement officer at PAN Foundation.

And the need to boost awareness of this critical healthcare resource.