Federal payments for Medicare Part D catastrophic coverage exceeded $33 billion in 2015, more than triple the amount paid in 2010, according to a report released Thursday by HHS' Office of Inspector General.
Medicare Part D beneficiaries enter catastrophic coverage when their out-of-pocket costs exceed a certain threshold, the OIG said.
For its report, the OIG said it analyzed CMS data to determine the amount the federal government spent for catastrophic coverage. The OIG said it also analyzed the Part D prescription drug event records to identify specific drugs dispensed in catastrophic coverage.
According to the report, the U.S. is spending more on Medicare Part D catastrophic coverage. As noted earlier, the OIG specifically found federal payments for catastrophic coverage exceeded $33 billion in 2015, more than triple the amount paid in 2010.
The OIG said this growth was significantly driven by spending for high-price drugs. According to the report, by 2015, almost two-thirds of the total drug spending in catastrophic coverage was attributable to high-price drugs. In 2010, high-price drugs were responsible for one-third of the spending.
Additionally, the OIG said, 10 high-price drugs accounted for nearly one-third of all drug spending for catastrophic coverage in 2015. Most of these drugs cost thousands of dollars per month and treat conditions such as hepatitis C, cancer and multiple sclerosis. The average prices for each of these drugs ranged from $1,200 to almost $34,000 per month, according to the report.
"The dramatic growth in federal payments for catastrophic coverage and the underlying issue of high drug prices must be analyzed and addressed to secure the future of the Part D program," the OIG concluded. "The issue of high-price drugs is not exclusive to catastrophic coverage; it affects the entire Part D benefit and can lead to higher costs for all beneficiaries."
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