ISSUE. Between 2013 and 2017, spending on Medicare Part D catastrophic coverage more than doubled, reaching over $59 billion in 2017. In the catastrophic phase, beneficiaries are responsible for 5 percent coinsurance, which can result in high out-of-pocket costs. GOALS. To inform redesign of the Part D catastrophic benefit by providing data on: beneficiary characteristics in the catastrophic phase; factors driving entry into catastrophic coverage; and patterns of spending, specialty drug use, and utilization among these beneficiaries. METHODS. Analysis of Medicare Part D claims and beneficiary data from 2013 to 2017. KEY FINDINGS. Among Part D beneficiaries not receiving Medicare low-income subsidies, those who entered catastrophic coverage in 2017 averaged $3,218 in total annual out-of-pocket spending, compared to $486 among enrollees who did not enter catastrophic coverage that year. Beneficiaries who entered catastrophic coverage had more chronic conditions, but the biggest difference was specialty drug use. Close to 60 percent of catastrophic coverage enrollees took a specialty drug compared to 11 percent of beneficiaries who did not enter this coverage phase. CONCLUSIONS. To reduce the high drug cost burden for Medicare Part D enrollees in catastrophic coverage, policy options should focus on the use and prices of specialty drugs.
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