The COVID-19 pandemic has resulted in substantial cases and deaths among long-term care facility (LTCF) residents and staff, though these numbers dropped precipitously after vaccine rollout began. As of May 17^th, 2021, the US has reported over 184,000 COVID-19 deaths among LTCF residents and staff, accounting for nearly one-third of all COVID-19 deaths in the US. These data do not reflect the full extent of COVID-19’s impact on LTCFs beyond nursing homes, however, as data gaps for settings serving nonelderly people with disabilities are an ongoing challenge. Settings for which data are incomplete include certain institutions, such as intermediate care facilities for people with intellectual or developmental disabilities (ICF/IIDs) and inpatient behavioral health settings, and congregate community-based settings, such as group homes, personal care homes, assisted living facilities (ALFs), and adult day programs.  

In addition to incomplete data, COVID-19 vaccine access and distribution efforts have varied across LTCF setting types. While the CDC’s Pharmacy Partnership for Long-Term Care facilitated the initial vaccination of residents and staff at most nursing homes and ALFs, other LTCF types were ineligible for the Partnership. Moreover, now that the Partnership has ended, CMS estimates that the number of new residents and staff entering nursing homes and ALFs over the next year is expected to exceed the number of those that were offered a vaccine through the Partnership.

Recognizing that ongoing vaccination efforts are crucial to ending the pandemic, CMS issued an Interim Final Rule with Comment Period (IFC) that establishes new vaccine reporting and/or education requirements for nursing homes and ICF/IIDs as of May 21^st, 2021. Public comments are due July 12, 2021, after which CMS may revise the rule. CMS also seeks public comment about whether similar requirements should apply to inpatient behavioral health settings and community-based congregate settings. This issue brief explains the new requirements and identifies where gaps remain across different LTCF settings (Figure 1). The Appendix provides detail about the various types of LTCFs.

What are the new reporting requirements for LTCFs?

Under the new interim final rule, nursing homes must report weekly on the COVID-19 vaccination status of all residents and staff as well as COVID-19 therapeutic treatment administered to residents. These requirements apply to both Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities (NFs). The new vaccine data elements must be reported to the CDC’s National Healthcare Safety Network (NHSN) and include the total numbers of residents and staff, numbers of residents and staff vaccinated, numbers of each dose of COVID-19 vaccine received, and COVID-19 vaccination adverse events. As with other Medicare and Medicaid conditions of participation, nursing homes that fail to follow the new reporting requirements may have to pay a civil monetary penalty.

The new interim final rule does not mandate COVID-19 vaccination or treatment reporting for other LTCF types. CMS concluded that requiring ICF/IIDs to participate in mandatory vaccine reporting would create an administrative burden, as very few (only about 80 out of over 5,700) currently participate in the NHSN or another formal reporting program, and requiring participation could involve new equipment, staff, and training. CMS also notes that ICF/IIDs do not appear to be administering COVID-19 therapeutics at this time. The new reporting requirements also do not apply to other LTCFs, such as inpatient behavioral health settings or congregate community-based settings. For all of these settings, CMS encourages voluntary reporting as facilities are able to do so and seeks comment on reporting barriers and ways to encourage voluntary reporting. Another rule that requires CDC reporting on COVID-19 cases and deaths applies only to nursing homes and not to other LTCF types.

What are the new vaccine education and offering requirements for LTCFs?

The new interim final rule’s requirements to educate residents/clients and staff about the COVID-19 vaccine and offer the vaccine when available apply more broadly, to both nursing homes and ICF/IIDs. CMS notes that these new requirements build on existing regulations that govern influenza and pneumonia immunizations for nursing homes and preventive care including immunizations for ICF/IIDs. In the preamble, CMS clarifies that staff who must be educated about and offered the vaccine include those who work in the facility at least once a week. Facilities must maintain documentation on their vaccine education efforts, administration of multi-dose vaccines, and efforts to appropriately acquire subsequent doses as necessary for all residents/clients and staff. As with other Medicare/Medicaid conditions of participation, facilities may be subject to civil money penalties if they fail to comply with the new requirements.

Under the new rule, nursing home and ICF/IID vaccine education efforts must include the benefits, risks, and potential side effects of the vaccine and the most current information regarding additional doses. In the preamble, CMS notes that facilities may choose to include other staff education topics, such as further information on the development of the vaccine, how the vaccine works, particulars of the multiple doses, and the low likelihood of potential side effects. The preamble also states that residents/clients and their representatives should be told that they are able to receive the vaccine without copays or out-of-pocket costs. Finally, CMS reminds facilities that educational materials should be made available in accessible formats, such as large print, Braille, American Sign Language, closed captioning, audio descriptions, and plain language.

The new rule requires nursing homes and ICF/IIDs to offer the COVID-19 vaccine to all residents/clients and staff unless immunization is medically contraindicated or they have already been immunized. The rule specifies that residents/clients and staff may refuse the vaccine and may change their decision at any time. Recognizing that decisions about whether to receive the vaccine may change over time, the preamble notes that if an individual requests a vaccine but missed earlier opportunities for any reason, facilities should try to acquire a vaccination opportunity for that individual “as quickly as practicable.” In the preamble, CMS clarifies that facilities may provide the vaccine directly or arrange for vaccination through another provider, such as a pharmacy or health department.  

How are other congregate care settings addressed?

CMS is not requiring other LTCFs, such as inpatient behavioral health settings and congregate community-based settings, to report on COVID-19 vaccination, provide education, or offer the vaccine to residents and staff at this time. CMS notes that individuals in psychiatric facilities may only be inpatients for short periods, making a two-dose vaccine series challenging to administer, and CMS currently is unable to guarantee availability of the single-dose vaccine for these facilities. To facilitate vaccination for residents/clients and staff of congregate community-based settings, such as ALFs, group homes, and adult day centers, CMS encourages collaboration between these settings and state Medicaid agencies and state and local health departments to learn about vaccine distribution options.

CMS seeks public comment on the feasibility of extending COVID–19 vaccine reporting, education, and offering requirements to other congregate LTCFs. Specifically, CMS seeks public comment on:

• Potential barriers that other LTCFs may face in meeting new requirements, such as staffing, resident/client population characteristics, and potential unintended consequences;
• Any existing state or local licensing or certification requirements or facility policies related to vaccines for congregate community-based settings and any benefits or challenges from policy implementation;
• Who should be responsible for vaccine access for residents and staff who participate in multiple settings (such as both residential and day programs);
• How to ensure equitable vaccine access in congregate community-based settings and identify access barriers for staff;
• Available data on admission rates, average length of stay, comorbidities that may increase residents/clients’ risk of severe illness from COVID-19, and rates of employee turnover and employee sharing across congregate living settings.

Looking Forward

The new COVID-19 vaccine reporting, education, and offering requirements establish some standards and oversight for ongoing vaccination efforts in nursing homes, as the CDC Partnership has ended but the pandemic continues. Still, as CMS recognizes, data gaps remain, and the new standards currently do not apply across all LTCF types. The new rule does not require nursing homes to report COVID-19 vaccination or treatment data by resident/staff demographics such as race/ethnicity, continuing a data gap that pre-dates the pandemic. While ICF/IIDs are subject to the new education and offering requirements, there are not similar requirements for other long-term care settings that present similar COVID-19 risk factors for residents and staff, including inpatient behavioral health facilities and congregate community-based settings, and none of these settings are required to report data. Until data, resource, and oversight gaps across the long-term care continuum are filled, nonelderly people with disabilities may continue to experience disproportionate barriers to vaccine access compared to people in nursing homes, and the full impact of COVID-19 on this population will not be completely understood.

Because Medicaid is the primary payer for long-term care services and supports provided in congregate community-settings, states may consider leveraging the new enhanced federal Medicaid HCBS funding included in the American Rescue Plan to support vaccination efforts in settings across the long-term care continuum. Recent CMS guidance confirms that states may use these additional federal funds to facilitate COVID-19 vaccine access for Medicaid HCBS enrollees, many of whom reside into the categories of HCBS congregate care settings discussed above. For example, states can use the new funds to assist Medicaid HCBS enrollees with scheduling vaccination appointments, provide direct support services during appointments, provide transportation to appointments, develop in-home vaccination options, and conduct vaccine outreach and education. While the availability of effective vaccines has helped alleviate the toll the pandemic has taken on LTCFs, continued education and data on vaccine access can help inform ongoing COVID-19 response efforts.

Appendix

Much attention has focused on President Biden’s stated goal of vaccinating 70% of U.S. adults by July 4th. While achieving a high overall vaccination rate is important for recovery from the COVID-19 pandemic, a new analysis of people ages 12 and older—a different population than President Biden’s goal, but one that is currently eligible for vaccination—projects that 65% will have received at least one dose by July 4th, but 63% of Hispanic people and only about half (51%) of Black people will have received one dose at the current pace of vaccination. The lagging vaccinations among Black and Hispanic people stand in contrast to projections that Asian people will exceed a 70% level, while 66% of White people will reach it by Independence Day.

Researchers from Stanford University and KFF, using state-reported vaccination data by race/ethnicity, highlight how gaps in vaccines for Black and Hispanic people could persist even if an overall vaccination benchmark is achieved indicating the importance of addressing these gaps with focused efforts to reach specific populations. The analysis further estimates that at the current pace of vaccination, Hispanic people would reach a 70% coverage level at the end of July and White people would reach this level by early August, reflecting a faster recent pace of vaccination among Hispanic people. However, Black people would still not have reached this level by the beginning of September.

Due to data limitations, the projections focus on the vaccinations among people ages 12 and older rather than adults, using 70% receiving at least one dose by July 4th as an illustrative measure to examine potential disparities across groups. Vaccination rates among adults are higher than those among adolescents, who became eligible for the vaccine more recently.

The data note also looks at state-level projections. Asian people are on track to reach a 70% coverage rate in nearly all reporting states (40 of 44), and White people are on track in just over a third of reporting states (18 of 47). Hispanic people are projected to reach 70% by July 4 in 13 of 44 reporting states, while Black people are estimated to reach the level in only 5 of 47 reporting states.

You can read the full findings, Disparities in Reaching COVID-19 Vaccination Benchmarks: Projected Vaccination Rates by Race/Ethnicity as of July 4.

The KFF COVID-19 Vaccine Monitor is an ongoing research project tracking the public’s attitudes and experiences with COVID-19 vaccinations. Using a combination of surveys and qualitative research, this project tracks the dynamic nature of public opinion as vaccine development and distribution unfold, including vaccine confidence and acceptance, information needs, trusted messengers and messages, as well as the public’s experiences with vaccination.

Who are the Unvaccinated?

As of late May 2021, a majority of U.S. adults have received a COVID-19 vaccine, with 62% of adults reporting having gotten at least one dose according to the KFF COVID-19 Vaccine Monitor. There are still substantial shares of the adult population who have not received a vaccine and many do not plan on getting vaccinated. This analysis, drawing on data from the KFF COVID-19 Vaccine Monitor, provides some insights into the demographics of the currently unvaccinated population as well as their views of vaccines generally and the pandemic more broadly.

Unvaccinated adults are a shrinking population in the U.S. that, as of late May 2021, consists of about one-third of U.S. adults (37%). Adults in this group are those, who despite outreach efforts and being eligible for a vaccine for at least six weeks, have not received a COVID-19 vaccine. The unvaccinated group are younger, more likely to identify as Republicans or be Republican-leaning, and more likely to have lower levels of education and lower incomes than the vaccinated population.

Unvaccinated adults are significantly younger, with 29% of those in the group falling in the 18-29 year old range compared to 17% of those in the vaccinated group. In addition, a smaller share of unvaccinated adults are 65 and older (9%) than the vaccinated group (28%). This may reflect recent changes in access to vaccines with older populations being among the first groups eligible to be vaccinated in states. President Biden announced that 90% of adults would be eligible to get the vaccine by April 19^th but there were still significant waiting times for many adults who had just gotten eligible. Over the next few weeks we will better know whether these age differences are due to vaccine access or to actual different vaccine intentions among younger adults.

There are strong partisan differences in vaccine intentions with almost half (49%) of unvaccinated adults identifying as Republicans or Republican-leaning independents, compared to three in ten (31%) vaccinated adults. On the other hand, Democrats and Democratic-leaning independents make up a majority of the vaccinated population (about six in ten), while about three in ten in the unvaccinated population identify as Democrats or Democratic-leaning independents.

Compared to vaccinated adults, smaller shares of White adults are unvaccinated, with no significant differences for Black and Hispanic adults on whether they have received at least one-dose so far, despite Black and Hispanic adults lagging in vaccination rates compared to Whites. Around two-thirds (64%) of vaccinated adults are White, compared to 56% of unvaccinated adults. With difficulty accessing vaccine locations and services disproportionately impacting the non-White population, current outreach continues to strive to bridge the gap.

Americans with lower levels of education make up a larger share of the unvaccinated population than the vaccinated one, with 46% of unvaccinated adults holding a high school degree or less compared to 34% of vaccinated adults. Vaccinated Americans are twice as likely as unvaccinated to have a college degree or higher (38% vs. 19%).

The unvaccinated group also tends to include disproportionate shares of adults without health insurance coverage as well as those with lower levels of income. Those under the age of 65 without insurance make up about one quarter of the unvaccinated population, and 42% of all unvaccinated adults report earning less than $40K a year.

The “Definitely not” group compared to the “Wait and see” group

KFF has been tracking vaccine intentions over the past six months and while there are clear demographic differences between vaccinated adults and unvaccinated adults, there are also differences within the unvaccinated population depending on whether they are still open to getting a vaccine or not. Specifically, those who say they want to “wait until it has been available for a while to see how it is working for other people” before getting vaccinated, the wait and see group (12% of all adults) look distinctly different from the most vaccine resistant group, those who say they will “definitely not” get a COVID-19 vaccine (the definitely not group represents about 13% of U.S. adults). While the share of the U.S. adult population who self-identified as “wait and see” has decreased over the past several months as tens of millions of U.S. adults have received a vaccine and few people have experienced serious side effects from the vaccine, the share of the public who are in the “definitely not” group has not shifted dramatically over the past six months.

The key demographic differences between the “wait and see” and the “definitely not” groups center on racial and ethnic identity and political partisanship. Half of those in the “wait and see” group are people of color. Throughout the rollout of the vaccines, larger shares of Black and Hispanic adults have reported they would want to “wait until it has been available for a while to see how it is working for other people” before getting vaccinated. This still holds true in the latest KFF COVID-19 Vaccine Monitor with Black adults and Hispanic adults both representing about one-fifth of the “wait and see” group. On the other hand, the most vaccine resistant group, those who say they will “definitely not” get a COVID-19 vaccine is overwhelmingly made up of White adults (70% of the group compared to 49% of the “wait and see” group).

The “wait and see” group is also split politically, with about four in ten who identify as Republicans or Republican-leaning independents and another four in ten as Democrats or Democratic-leaning, while the more vaccine resistant “definitely not” group is overwhelmingly Republican-leaning, with two-thirds (67%) in the group identifying as either Republican or Republican-leaning independents.

There is a smaller share of rural residents in the “wait and see” group (11%) than in the “definitely not” group (23%) but the “definitely not” group is also characterized by other demographics that disproportionately live in rural areas, including more White adults and Republicans.

There are no significant differences when you look at age, education, and insurance status among those who are unvaccinated with about seven in ten in both unvaccinated groups under the age of 50, about one in five have college degrees, and similar shares reporting being uninsured.

Vaccine Intentions Among Unvaccinated Adults Strongly Connected To Views Of Pandemic, Past Flu Vaccine Behavior

People’s intentions to get a COVID-19 vaccine are also largely connected with their previous experience with vaccines and their overall views of the pandemic.

Unvaccinated adults are less likely to reporting getting of the flu vaccine, with over three-quarters (77%) saying they do not normally get a flu vaccine each year. The vast majority of unvaccinated adults who say they will “definitely not” get the COVID-19 vaccine say they don’t regularly get their flu vaccine (91%), compared to about seven in ten (71%) of those in the “wait and see” group.

About six in ten unvaccinated adults (57%) think that what is said about COVID-19 in the news is generally exaggerated, significantly larger than the share of vaccinated adults who say the same (22%).  Again, differences exist between the “wait and see” and the “definitely not” with close to twice as many of the latter group saying the news has exaggerated Covid-19. About three-fourths of vaccinated adults either say the news have either been “generally correct” or “generally underestimated” the severity of the pandemic.

In addition to thinking the news has overstated the problem, most unvaccinated adults say they are not worried about getting sick from coronavirus. About seven in ten unvaccinated adults overall, including nearly nine in ten (88%) of those in the “definitely not” group say they are either “not too worried” or “not at all worried” about personally getting sick from COVID-19. Those in the “wait and see” group are more likely to say they are worried, but still a majority of them (56%) say they are not worried.

Despite being less likely to be worried about getting sick, one-third of unvaccinated adults say they know someone close who has died due to COVID-19, according to the April COVID-19 Vaccine Monitor – including 29% of those who say they definitely won’t get the vaccine.

Unvaccinated Adults Have Different Concerns and Some In The “Wait and See” Group Say Certain Incentives Could Persuade Them

The KFF COVID-19 Vaccine Monitor has consistently found that many unvaccinated adults report being concerned about the safety of the vaccines. This is true among both the “wait and see” group and the “definitely not” group with large majorities of both saying they are concerned the vaccines are not as safe as they are said to be. The two groups differ on other concerns. For example, they differ in terms of concerns about the vaccine’s impact on fertility (two-thirds of the “definitely not” group say they are at least somewhat concerned about this compared to 44% of the “wait and see” group) and on concerns about having to pay for a vaccine (one-third of the “wait and see” group is concerned about this compared to 19% of the “definitely not” group). Nearly four in ten (37%) in the “wait and see” group also express concern about being able to get the vaccine from a place they trust, perhaps another indicator of health care access issues within this group.

Many states, public health departments, and employers are working on incentives aimed at increasing vaccine uptake among the currently unvaccinated populations. KFF has been tracking the reported effectiveness of various potential incentives for the past few months and finds substantial shares of those in the “wait and see” group say they would be more likely to get the vaccine if it was offered to them at a place they normally go for care (46%), they were required to get vaccinated in order to fly on an airplane (41%) or attend large gatherings (40%). In addition, nearly half of the “wait and see” group (44%) say they would be “more likely” to get a vaccine if one of the vaccines currently authorized for emergency use received full approval from the FDA. Yet, few of those in the “definitely not” group say any of these incentives, conveniences, or requirements would make them more likely to get vaccinated. This is also consistent with previous reports that finds these two groups differ in terms of reported access, information needs, and influence of both “carrot” and “stick” methods of incentives to get vaccinated.

It is clear there are distinct groups within the unvaccinated population and their views are not monolithic. While some within the “wait and see” population may be persuaded to get a vaccine in the coming weeks, few in the “definitely not” group show any indication of changing their minds as their views towards the COVID-19 vaccine are consistent with past vaccine behaviors as well as overall views of the threat of COVID-19.

As more people across the country get at least an initial dose of a COVID-19 vaccine, public health officials are increasingly trying to reach the shrinking pool of unvaccinated adults – now roughly a third of all adults.

The latest KFF COVID-19 Vaccine Monitor report explores this group’s demographic profile and finds that, compared to vaccinated adults, unvaccinated adults are younger and more likely to identify as Republican or Republican-leaning. They also have lower levels of education and income and are more likely to be uninsured.

Most (56%) are White adults, though large shares are Black (14%) and Hispanic (19%) adults, who are somewhat less likely to have received an initial dose than White adults are.

Among unvaccinated adults, there are significant differences between those who say they want to “wait and see” before getting a vaccine (12% of all adults) and those who say they will “definitely not” get one (13% of all adults).

While most in both groups live in suburban areas, the “wait and see” group includes a larger share of urban residents (37% v. 17%), while the “definitely not” group includes a larger share of rural residents (23% v. 11%).

The “wait and see” group is roughly evenly divided between White adults (49%) and people of color (51%), including many Black (22%) and Hispanic (20%) adults. They are also about as likely to say they are Democrats or Democrat-leaning (39%) as Republican or Republican-leaning (41%).

In contrast, those who say they will “definitely not” get a vaccine are largely White adults (70%) and Republican or Republican-leaning (67%).

The vast majority of the “definitely not” group (83%) and nearly half of the “wait and see” group (45%) also say that the seriousness of the COVID-19 pandemic has been “generally exaggerated” in the news. Among those who have been vaccinated, just 22% say so.

President Biden’s FY 2022 budget proposes lowering the Medicare enrollment age from 65 to 60, and a group of over 150 House Democrats recently called for a provision lowering the Medicare age to 60 or 55 to be included in the President’s American Families Plan. President Biden’s budget proposes “giving people age 60 and older the option to enroll in the Medicare program with the same premiums and benefits as current beneficiaries, but with financing separate from the Medicare Trust Fund.” The President’s budget proposal does not detail how lowering the Medicare age would work or be financed, or how it would affect current Medicaid spending and enrollees. While lowering the Medicare eligibility age based solely on work history to 60 could provide coverage to older adults who are currently uninsured or provide a more affordable option for people with private health insurance coverage, it also could affect Medicaid enrollees in this age range. Some Medicaid enrollees might lose Medicaid coverage when they gain Medicare, and others might become dually eligible for both programs, depending on the details of how it would work.

There are 3 million adults ages 60-64 enrolled in Medicaid as of 2019, just under 1 million of whom are already dually eligible for both Medicare and Medicaid (because they receive Social Security Disability Insurance (SSDI)). Medicare covers over 60 million seniors and nonelderly adults with significant long-term disabilities. Under current law, people with a sufficient work history are entitled to enroll in Medicare at age 65, and enrollment for non-elderly adults is limited to people who receive SSDI, generally after a 24 month waiting period. This issue brief highlights key differences between Medicare and Medicaid and raises questions about how a policy to lower the age of Medicare eligibility could affect individuals who are currently enrolled in Medicaid.

How could lowering the Medicare age affect people eligible for full Medicaid benefits?

What is current policy? Today, some people are eligible for both Medicare and full Medicaid benefits, while others may lose Medicaid eligibility once they become eligible for Medicare. A person’s status as a Medicare beneficiary does not qualify them for full Medicaid benefits. Instead, a person must independently qualify for Medicaid through an eligibility pathway based on low income or disability. Individuals in the 60-64 age range may qualify for Medicaid through various pathways that may have different eligibility criteria and benefit packages. For example:

• Poverty-related Medicaid pathways, such as the ACA expansion (which 38 states plus DC have opted for), consider a person’s income but do not have an asset test. Notably, receiving Medicare and/or turning 65 makes someone ineligible for Medicaid as an ACA expansion adult.
• Disability-related Medicaid pathways have relatively higher income limits compared to the poverty-related pathways described above and may have an asset limit, though some states have expanded or eliminated asset limits. State Medicaid programs must cover SSI enrollees, while other disability-related pathways are optional. States can choose to cover seniors and people with disabilities up the federal poverty level, people with high medical expenses considered medically needy, working people with disabilities, and those with incomes up to 300% of the federal SSI benefit amount ($2,382 per month for an individual in 2021) who need long-term home and community-based services, though eligibility pathways vary substantially by state. Unlike the ACA expansion pathway, individuals who qualify under these pathways may be dually eligible for Medicare. For those dually eligible for Medicare and Medicaid, Medicare is the primary payer, and Medicaid provides wrap-around benefits, filling in gaps in Medicare coverage, and also helps with Medicare’s out-of-pocket costs (discussed below).

What are the key policy choices and implications?  Lowering the age for Medicare would require policy choices about whether to allow individuals in the new age range to continue to receive full Medicaid benefits, if eligible under the ACA expansion or other poverty- or disability-related pathways, or whether these individuals would move from Medicaid to Medicare as their sole or primary source of coverage. How these eligibility issues are resolved has important implications for enrollee benefits and cost-sharing as well as state and federal costs (discussed below). Additionally, Medicare enrollment is limited to specific periods, while Medicaid enrollment is open year-round. However, Medicaid eligibility must be periodically renewed, while Medicare eligibility currently continues without the need to renew eligibility once a person turns 65.

How could lowering the Medicare age affect benefits for current Medicaid enrollees?

What is current policy?  Medicare and Medicaid’s benefit packages differ. Both cover inpatient and outpatient care and prescription drugs. Medicare generally includes wider participation of providers, though Medicaid drug coverage is broader. Medicaid also covers long-term care services in nursing homes and the community and specialty behavioral health services, which Medicare generally does not. Medicaid covers dental, vision, and hearing benefits for adults at state option. Traditional Medicare currently does not generally cover these benefits, although most Medicare Advantage plans do offer some dental, vision and hearing benefits. President Biden’s budget calls for adding these benefits to Medicare. Medicaid rules also require states to recover the cost of long-term care benefits provided to people age 55 and older from the estates of deceased enrollees, and other costs may be subject to estate recovery at state option. Medicare does not require estate recovery, though it also does not cover long-term care services. The appeals process also differs between the two programs, with Medicaid allowing services to continue while an appeal is pending.

What are the key policy choices and implications?  Policy choices about whether individuals in the new age range could retain Medicaid if eligible or instead would move from Medicaid to Medicare are important because individuals currently eligible for Medicaid could lose access to benefits not covered by Medicare if they are required to move to Medicare as their sole source of coverage. Additionally, those appealing benefit reductions or terminations would not have continued access to services while appeals are resolved in Medicare as is the case in Medicaid.

How could lowering the Medicare age affect provider networks for current Medicaid enrollees?

What is current policy? People may have access to different provider networks in Medicare vs. Medicaid, due to different managed care and network adequacy rules. Once eligible for coverage, Medicare allows enrollees to choose whether to receive benefits under the traditional Medicare program, or enroll in a Medicare Advantage managed care plan. Traditional Medicare offers access to a broad provider network, while Medicare Advantage plans have restricted provider networks. States may require Medicaid enrollees to enroll in managed care, which can further restrict provider networks beyond those that participate in the state’s fee-for-service Medicaid program.

What are the key policy choices and implications? People could gain access to a broader provider network through traditional Medicare compared to their state’s Medicaid program. If moving from Medicaid to Medicare, individuals could experience  changes in delivery systems and provider networks, depending on whether they opt for Medicare Advantage or traditional Medicare, which could mean disruptions in care.

How could lowering the Medicare age affect out-of-pocket costs for current Medicaid enrollees?

What is current policy? The Medicare Savings Program (MSP) is a Medicaid pathway that helps to cover Medicare’s premiums and/or cost-sharing requirements for current Medicare enrollees with low income and limited assets. This is an important consideration because Medicare’s premiums and cost-sharing are higher than those under Medicaid, which limits the populations who can be subject to premiums and has nominal cost-sharing. Box 1 summarizes current Medicare out-of-pocket costs and the assistance available through MSP.

What are the key policy choices and implications?  Proposals to lower the Medicare age likely will have to account for what type of assistance would be available to make the new coverage affordable for lower income enrollees, such as individuals who may lose Medicaid and transfer to Medicare. Without addressing this issue, some people could face higher out-of-pocket costs in Medicare compared to Medicaid. For example, people ages 60-64 who currently receive Medicaid in the ACA expansion group are eligible for that coverage based on their low incomes and without an asset test. When these individuals become eligible for Medicare under current law, they must meet both income and asset limits (Box 1) to qualify for MSP help with Medicare out-of-pocket costs. Though a few states have expanded or eliminated MSP asset limits, this generally means that individuals with savings above $7,970 would be ineligible for MSP, even though they might have been eligible for full Medicaid benefits in expansion states.

How might lowering the Medicare age affect state and federal costs and provider payments?

What is current policy? Medicare is a federal program primarily financed by a combination of payroll taxes, general revenue, and premiums. In traditional Medicare, the federal government establishes the methodology for making payments to hospitals, physicians and other health care providers under the traditional Medicare program and uses a formula to establish capitated payments to Medicare Advantage plans. In contrast, Medicaid is financed jointly by states and the federal government, and states determine provider payment rates within broad federal standards.

What are the key policy choices and implications? The precise impact of lowering the Medicare age on federal and state costs depends on how the policy is structured. Transitioning current Medicaid enrollees to Medicare would be likely to increase federal spending and reduce state costs as states would no longer share in the costs of covering these individuals. If individuals 60-64 are permitted to retain their current Medicaid eligibility, states would continue to fund a share of these individuals’ Medicaid costs, though Medicare would be the primary payer for the benefits it covers. If enrollees move to Medicare and do not retain full Medicaid eligibility, the federal government would no longer pay for a share of benefits that are only available through Medicaid (like long-term care).

Whether and how lowering the Medicare age would affect provider payment rates is likely to vary depending on the type of provider. Medicaid payment rates for hospitals vary across states, but after accounting for supplemental payments, overall rates for hospitals are comparable to or higher than Medicare. Lowering the Medicare age might lead to lower revenues for physicians, as Medicaid payment rates for physicians tend to be lower than Medicare. Gross margins for Medicare Advantage plans are higher than for Medicaid managed care plans, though Medicare Advantage plans now cover an older population with higher health spending. While rates in Medicaid plans must be actuarily sound, they tend to be lower than other markets.

Looking Ahead

Lowering the Medicare enrollment age could have considerable impacts on the scope of covered benefits, out-of-pocket costs, and provider access for low-income people as well as implications for state and federal health care costs. Depending on individual circumstances and key policy decisions, people who move from Medicaid to Medicare might experience higher out-of-pocket costs and/or fewer covered benefits. On the other hand, they might have access to a broader provider network in traditional Medicare, compared to their state’s Medicaid program. On the whole, current Medicaid enrollees are likely to face different issues than those who move from private insurance or uninsured status to Medicare.

The question of what would happen when a new, expensive prescription drug comes to market for a disease like Alzheimer’s that afflicts millions of people has loomed large in discussions over drug prices in the U.S.—and now we’re about to find out. After a nearly 20-year dry spell in new treatments for Alzheimer’s disease, the Food and Drug Administration (FDA) just approved a new Alzheimer’s medication, Aduhelm (aducanumab), developed by Biogen, with an expected annual price tag of $56,000. While the scientific community debates the evidence of the effectiveness of this new drug, the FDA’s decision raises hope for Alzheimer’s patients and their families, along with serious cost concerns for patients and payers, particularly Medicare.

Alzheimer’s disease is estimated to affect about 6 million Americans, the vast majority of whom are age 65 and older and therefore eligible for Medicare. As an intravenous infused medication administered by physicians, Aduhelm will be covered under Medicare Part B, which generally covers FDA-approved physician-administered medications that are reasonable and necessary for the individual patient. (In contrast, Medicare Part D covers retail prescription drugs.) With FDA approval in hand, attention now turns to decision-makers at the Centers for Medicare & Medicaid Services (CMS) who may opt to undertake a National Coverage Determination process that could set some limits on the conditions of Medicare coverage for Aduhelm based on the drug’s clinical effectiveness.

Medicare’s long-standing practice is to make coverage determinations without taking cost into consideration. While Medicare sets rates for hospitals and other providers, it does not set its own rates for drugs covered under Part B. Instead, Medicare reimburses providers 106% of the Average Sales Price (ASP), which is the average price to all non-federal purchasers in the U.S, inclusive of rebates. For drugs where no ASP is available, such as a new drug like Aduhelm, Medicare pays 103% of the wholesale acquisition cost (WAC) until ASP data are available. The WAC is equivalent to a list price and typically higher than ASP. Biogen has set the list price for Aduhelm at $56,000 for a year of treatment.

It is hard to know exactly how many Medicare beneficiaries will take Aduhelm, but even a conservative estimate would lead to a substantial increase in Medicare spending. In 2017, nearly 2 million Medicare beneficiaries used one or more of the currently-available Alzheimer’s treatments covered under Part D, based on our analysis of Medicare Part D claims data. If just one-quarter of these beneficiaries are prescribed Aduhelm, or 500,000 beneficiaries, and Medicare pays 103% of $56,000 in the near term, total spending for Aduhelm in one year alone would be nearly $29 billion, paid by Medicare and the patients who use this drug – an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending. To put this $29 billion amount in context, total Medicare spending for all Part B drugs was $37 billion in 2019.

If 1 million Medicare beneficiaries receive Aduhelm, which may even be on the low end of Biogen’s expectations, spending on Aduhelm alone would exceed $57 billion dollars in a single year – far surpassing spending on all other Part B-covered drugs combined. In fact, this amount is roughly the same that Medicare paid for all hospital outpatient services in 2019.

Alzheimer’s patients covered under Medicare Part B could also face high out-of-pocket costs for treatment with Aduhelm, both for the drug itself and for the cost of related medical services. For most Part B covered drugs and services, Medicare pays 80% of the cost and beneficiaries are responsible for the remaining 20%. This means beneficiaries would face about $11,500 in coinsurance for one year of Aduhelm treatment, which represents nearly 40% of the $29,650 in median annual income per Medicare beneficiary in 2019. Because Aduhelm is not a cure for Alzheimer’s disease, patients could incur these annual out-of-pocket costs over multiple years.

The majority of beneficiaries in traditional Medicare have supplemental insurance, such as Medigap, employer-sponsored retiree coverage, or Medicaid, that would cover some or all of the coinsurance. However, beneficiaries with Medigap or retiree health could see their premiums rise to account for higher plan liability associated with costs for Aduhelm. And close to 6 million Medicare beneficiaries, or 10% of all beneficiaries, are in traditional Medicare with no supplemental coverage, which means they are fully exposed to Medicare’s cost-sharing requirements and lack the financial protection of an out-of-pocket cap, unlike enrollees in Medicare Advantage plans.

The 24 million beneficiaries enrolled in Medicare Advantage plans are also responsible for cost sharing for Part B drugs, like Abuhelm, though they typically do not have supplemental insurance to help with these expenses. According to our estimates, in 2021, nearly 90% of Medicare Advantage enrollees are in plans that charge 20% coinsurance for Part B drugs provided in-network, the same as under traditional Medicare, though some plans impose coinsurance as high as 45% or 50% for Part B drugs administered by out-of-network providers. Medicare Advantage enrollees who use Aduhelm would be responsible for their share of costs until they reach the annual out-of-pocket maximum ($7,550 for in-network care and $11,300 for combined in-network and out-of-network care in 2021).

The billions of dollars in new Medicare Part B spending will likely lead to higher Part B premiums for all 56 million Part B enrollees in traditional Medicare and Medicare Advantage. Since Part B premiums are set to equal 25% of projected annual Part B expenditures, an increase in spending would lead to an increase in premiums. State and federal Medicaid spending will also rise, since Medicaid pays the Part B premium for about 12 million low-income Medicare beneficiaries with Medicaid, and covers coinsurance for 9 million of these beneficiaries who have both Medicare and full Medicaid coverage.

The introduction of a new high-priced drug could energize efforts in Congress to enact drug price legislation. Under H.R. 3, which passed the House of Representatives in the last Congress and was recently reintroduced, the HHS Secretary would have authority to negotiate prices for up to 250 drugs, drawing from the 125 drugs with the highest net spending in Medicare Part D and the 125 drugs with the highest net spending in the U.S. overall, which could include drugs covered under Part B, such as Aduhelm. Negotiated prices would be made available to enrollees in Part D plans and private insurance coverage, and to providers that administer physician-administered drugs. Other proposals under active consideration would limit annual price increases for Part B and Part D drugs and limit the financial incentives under Medicare’s existing Part B reimbursement system for physicians to administer higher-priced drugs. The Center for Medicare and Medicaid Innovation could also test models to modify Medicare payments for high-priced drugs.

At a time when federal and state policymakers are weighing several policy options to lower prescription drug prices, the approval of Aduhelm provides the latest high-profile example of the potential budgetary consequences of Medicare’s role as a price-taker in the pharmaceutical marketplace. Concerns about the impact on Medicare spending associated with Aduhelm are reminiscent of discussions that took place after the introduction of high-cost treatments for hepatitis C, though in that case, the new drugs cured the disease and were approved for a much smaller patient population. Aduhelm may represent hope for Alzheimer’s patients and their families who have waited years for new treatments to come along, but that hope is likely to come at a high cost to Medicare, beneficiaries, and taxpayers.

The Biden Administration has started taking steps to reverse Trump Administration policy and regulations that significantly narrowed the implementation and administrative enforcement of Section 1557, the Affordable Care Act’s nondiscrimination provision, particularly as the regulations apply to gender identity and sexual orientation. In addition, several lawsuits challenging the regulations, which were initially issued by the Obama Administration and later substantially revised by the Trump Administration, are pending. Section 1557 prohibits discrimination based on race, color, national origin, sex, age, and disability in health programs and activities receiving federal financial assistance. The two versions of the regulations, those from the Obama Administration followed by those from the Trump Administration, adopted conflicting interpretations about the content and scope of prohibited discrimination. This issue brief provides an update on current developments and identifies issues to watch in the coming weeks and months.

Administrative Actions

On May 10, 2021, the Biden Administration announced that the HHS Office for Civil Rights (OCR) will include gender identity and sexual orientation as it interprets and enforces Section 1557’s prohibition against sex discrimination (Figure 1). This announcement followed a federal agency review of existing regulations and policy directed by President Biden’s executive order on preventing and combatting discrimination based on gender identity and sexual orientation, which he issued on his first day in office. The May 2021 announcement marks both a reversal of Trump Administration policy and an expansion of Obama Administration policy. While the Obama Administration regulations included gender identity and sex stereotyping in the definition of sex discrimination, they omitted sexual orientation, noting that federal law in this area was still evolving at that time. Subsequently, the Trump Administration eliminated gender identity and sex stereotyping from the regulations. However, just after the Trump Administration regulations were published, the Supreme Court, in Bostock v. Clayton County, Georgia, ruled that sex discrimination in the employment context does include discrimination based on gender identity or sexual orientation. Following the Bostock ruling, two federal district courts issued nationwide preliminary injunctions (Figure 1 and described further below), blocking implementation of several provisions of the Trump Administration’s regulations related to Section 1557.

HHS recently indicated that it will issue a new notice of proposed rule-making (NPRM) to revise the Section 1557 regulations. The Biden Administration states that its “anticipated rulemaking proceeding will provide for the reconsideration of many or all of the changes to existing Section 1557 regulations” that are being challenged in current litigation (described below). The timeframe for the new NPRM is uncertain, with HHS stating that it intends to do so “as expeditiously as reasonably possible” while “account[ing] for HHS’s limited resources. . . .” In light of the Biden Administration’s May 10 announcement, it is likely that the new NPRM will propose not only restoring gender identity but also adding sexual orientation to the regulatory definition of sex discrimination, thereby expanding on the Obama Administration interpretation. The extent to which the new NPRM proposes restoring or expanding other Section 1557 provisions that were changed by the Trump Administration unrelated to the definition of sex discrimination, such as those related to discrimination in health insurance benefit design; language access; notices, grievance procedures, and enforcement; and covered entities, remains to be seen. The new NPRM also could propose restoring provisions prohibiting discrimination based on gender identity and sexual orientation that were eliminated by the Trump Administration in other federal health care regulations outside of Section 1557 that apply to Medicaid, the ACA Marketplaces, and private insurance issuers.

Court Actions

Three of the five cases challenging the Trump Administration regulations have been put on hold to provide the Biden Administration with additional time to complete its review of existing regulations and policy (Table 1). Courts in two of the cases on hold issued the nationwide preliminary injunction orders that continue to block implementation of some provisions of the Trump Administration regulations. These orders remain in place, although the federal government appealed both of them. A third case challenging the Trump Administration regulations also has been put on hold, though the parties disagree about how long the delay in that case should last. The cases currently on hold include:

• A DC case, Whitman-Walker Clinic v. HHS, brought by health care and social service providers who serve LGBTQ people and people with limited English proficiency (LEP). The district court’s nationwide preliminary injunction prevents the federal government from implementing provisions of the Trump Administration regulations that (1) exclude sex stereotyping from definition of sex discrimination and (2) incorporate a blanket religious freedom exemption from claims of sex discrimination. The next status report is due to the court on August 12, 2021.
• A New York case, Asapansa-Johnson Walker v. Azar, brought by two transgender women of color. The district court’s nationwide preliminary injunction prevents the federal government from implementing provisions of the Trump Administration regulations that exclude gender identity and sex stereotyping from definition of sex discrimination, require healthcare providers to treat individuals consistent with their gender identity, and prohibit providers from denying or limiting services based on gender identity. The next status report is due to the court on August 12, 2021.
• Another New York case, NY v. HHS, brought by a group of 23 states. Both sides have agreed to put the case on hold but disagree about when the next status report should be due to the court. The states propose June 13, 2021, while the federal government proposes August 12, 2021.

Two other cases challenging the Trump Administration regulations are currently active (Table 1). Decisions in these cases could influence the contents of the Biden Administration’s expected NPRM as well as the status of the Trump regulations that remain in effect. The active cases include:

• A Massachusetts case, Boston Alliance of Gay, Lesbian, Bisexual & Transgender Youth v. HHS, brought by a transgender man and health care and social service providers who serve LGBTQ people and people with LEP. A June 3, 2021 hearing is scheduled on HHS’s motion to dismiss the lawsuit.
• Another DC case, Chinatown Service Center v. HHS, brought by community-based organizations serving older adults with LEP. The complaint in this case was filed recently, and HHS has not yet responded.

Another two cases, which were filed to challenge the Obama Administration regulations and are still pending, raise issues about the interaction between Section 1557’s nondiscrimination provisions and federal laws that protect religious beliefs. The Supreme Court did not reach this issue in Bostock, noting that this is a question for future cases to decide. These cases include:

• Religious Sisters of Mercy v. Becerra, in which the Biden Administration is appealing a North Dakota federal court ruling that blocks it from requiring Catholic health care entities to perform or provide health insurance coverage for gender transition services under the Obama Administration’s Section 1557 regulations.
• Franciscan Alliance v. Becerra, in which religiously affiliated health care providers claim that the Obama Administration regulations’ inclusion of gender identity and termination of pregnancy in the definition of sex discrimination would require them to serve people seeking transgender care and people who have terminated a pregnancy in violation of the providers’ religious rights. The 5^th Circuit Court of Appeals sent the case back to the trial court to determine whether the providers’ claims are moot in light of the subsequent Trump Administration regulations as well as the recent Biden Administration actions. Briefing on these issues closes on June 18, 2021.

Looking Ahead

The interpretation and enforcement of Section 1557’s prohibition against discrimination in federally funded health programs and activities will continue to develop in the coming months. Outside of the Section 1557 regulations and surrounding litigation, federal courts in other cases have granted relief to individuals alleging discrimination under Section 1557, relying on the text of the statute itself. For example, a Wisconsin federal court permanently blocked the state Medicaid program’s categorical exclusion of gender affirming services from coverage as a violation of the statutory prohibition against sex discrimination. Future court rulings, the forthcoming NPRM, and administrative enforcement by OCR under the new Biden Administration policy together will influence Section 1557 law and policy and could affect the ability to access health coverage and care without discrimination.

The Medicare Part D program provides an outpatient prescription drug benefit to older adults and people with long-term disabilities in Medicare who enroll in private plans, including stand-alone prescription drug plans (PDPs) to supplement traditional Medicare and Medicare Advantage prescription drug plans (MA-PDs) that include drug coverage and other Medicare-covered benefits. This analysis provides the latest data about Medicare Part D enrollment, premiums, and cost sharing in 2021 and trends over time, based on data from the Centers for Medicare & Medicaid services (CMS) Part D Enrollment, Benefit, Landscape, and Low Income Subsidy files.

Part D enrollment in Medicare Advantage drug plans has increased over time, while enrollment in stand-alone prescription drug plans has decreased in recent years

A total of 48 million people with Medicare are currently enrolled in plans that provide the Medicare Part D drug benefit, representing more than three-quarters (77%) of all Medicare beneficiaries. This total includes plans open to everyone with Medicare, including stand-alone PDPs and MA-PDs, and plans for specific populations, including retirees of a former employer or union and Medicare Advantage Special Needs Plans (SNPs). Over time, Part D enrollment in MA-PDs has increased, reflecting enrollment growth in Medicare Advantage plans overall, while enrollment in PDPs has decreased each year since 2019.

In 2021, half of all Part D enrollees are enrolled in stand-alone PDPs (50%), and the other half are in MA-PDs (50%), but a slightly larger number of enrollees are in MA-PDs (24.1 million) than in PDPs (23.9 million) (Figure 1, Table 1). (MA-PD enrollment includes Medicare Advantage HMOs, PPOs, private fee-for-service, and Medicare Savings Account plans, and other Medicare private plans, including Medicare-Medicaid plans, Cost plans, and PACE plans). Between 2020 and 2021, the number of MA-PD enrollees increased by 11%, while enrollment in PDPs decreased by 4%.

Part D enrollment is concentrated in 3 national firms – UnitedHealth, Humana, and CVS – which have a combined 56% of total enrollment

The top three firms – UnitedHealth, Humana, and CVS Health – cover close to 6 in 10 of all beneficiaries enrolled in Part D in 2021 (56%), while the top five firms – including Centene and Cigna – account for three-quarters (74%) of Part D enrollment (Figure 2). With the exception of Kaiser Permanente, which exclusively offers MA plans, the top Part D plan sponsors offer both stand-alone PDPs and MA-PDs. For most firms, Part D enrollment is more concentrated in one market than the other; for example, CVS Health, Centene, and Cigna have greater enrollment in PDPs than MA-PDs (Table 2).

An increasing share of beneficiaries receiving low-income subsidies are enrolled in Medicare Advantage drug plans, with just over half now enrolled in MA-PDs

In 2021, nearly 13 million Part D enrollees, or just over 1 in 4, receive premium and cost-sharing assistance through the Part D Low-Income Subsidy (LIS) program. These additional financial subsidies, also called “Extra Help,” pay Part D premiums for eligible beneficiaries, as long as they enroll in stand-alone PDPs designated as premium-free “benchmark” plans, and reduce cost sharing. For the first time since Part D started in 2006, more LIS enrollees are in MA-PDs (6.8 million) than in PDPs (6.0 million) (Figure 3). Reflecting overall trends in Part D enrollment, the share of LIS enrollees in stand-alone PDPs has declined over time, from 87% in 2006 to 47% in 2021, while the share in MA-PDs has increased, from 13% in 2006 to 53% in 2021 (Table 1).

As part of increased enrollment in MA-PDs, more than one quarter of all LIS enrollees (26%) are now enrolled in Medicare Advantage Special Needs Plans (SNPs), up from only 4% in 2006. SNPs limit enrollment to beneficiaries with certain characteristics, including those with certain chronic conditions (C-SNPs), those who require an institutional level of care (I-SNPs), and those who are dually enrolled in Medicare and Medicaid (D-SNPs), which account for the majority of SNP enrollees.

Monthly Part D premiums have decreased somewhat in recent years; the 2021 weighted average premium for drug coverage is 3 times larger for PDPs than for MA-PDs

In 2021, the weighted average monthly premium for PDPs is $38, a 7% reduction (-$3) from a high of $41 in 2018 (Figure 4). The average monthly PDP premium amount has decreased somewhat in recent years, and has remained within a few dollars of the 2021 average since 2010. For MA-PDs, the monthly premium for the Part D portion of covered benefits averages $12 in 2021 (and $21 for Part C and Part D benefits combined). The average premium for drug coverage in MA-PDs is lower than the average premium for PDPs due in part to the ability of MA-PD sponsors to use rebate dollars (which may include bonuses) from Medicare payments for benefits covered under Parts A and B to lower their Part D premiums. The combined weighted average Part D premium across both types of plans is $26 in 2021, a reduction of roughly 20% (-$6) from 2018, driven largely by a decrease in the Part D portion of the monthly MA-PD premium.

The moderation of growth in the average Part D premium in recent years is likely related to changes in the Part D benefit that have reduced plan liability, in particular, an increase in the manufacturer coverage gap price discount on brand-name drugs from 50% to 70% in 2019, which has led to a reduction in plan liability for brand-name drugs during the coverage gap phase. Lower plan liability helps constrain total costs, enabling plans to lower their bids and, therefore, premiums. The average premium reduction among MA-PDs specifically is related to both an increase in the availability of zero premium plans and the reduction in plan liability for brand-name drug costs during the coverage gap phase.

Most Part D enrollees in 2021 (51% of PDP enrollees and 87% of MA-PD enrollees) are in plans offering enhanced benefits, which can include a lower (or no) deductible, reduced cost sharing, or a higher initial coverage limit than under the standard benefit design. The weighted average premium in 2021 for enhanced benefit PDPs is $44, which is roughly 40% higher than the monthly premium for PDPs offering the basic benefit ($32).

The average Part D deductible has increased for PDPs, while decreasing for MA-PDs; the 2021 weighted average annual drug deductible is 3.5 times larger in PDPs than in MA-PDs

In 2021, a large majority of PDP enrollees (86%) are in plans that charge a deductible, with nearly two-thirds (64%) in PDPs that charge the standard amount of $445 in 2021. Conversely, less than 1 in 5 MA-PD enrollees (18%) are in plans that charge the standard Part D deductible, and nearly half (47%) are in plans that charge no drug deductible. These enrollment patterns explain the wide divergence between PDPs and MA-PDs in the enrollment-weighted average Part D deductible amount. For PDPs, the average Part D deductible in 2021 is $350, 3.5 times larger than the average drug deductible in MA-PDs ($102) (Figure 5).

The increase in the weighted average Part D deductible for PDPs was particularly steep between 2019 and 2020, when two national PDPs modified their plan design from charging no deductible to charging a partial or full deductible in all or nearly all regions. Charging a full or partial deductible provides plans with an additional lever to reduce their liability, particularly for those enrollees who have relatively low total drug costs, and keep premium growth in check. Conversely, MA-PDs have more leverage to reduce Part D premiums because of rebate dollars from Medicare, and with the majority of MA-PDs offering enhanced benefits, they are more likely to have lower or no deductibles than PDPs.

Most Part D enrollees pay less than $10 for generic drugs, but many pay $40-$100 (or coinsurance of 40%-50%) for brand-name drugs; a larger share of MA-PD enrollees than PDP enrollees pay the maximum 33% coinsurance for specialty tier drugs

Most Part D enrollees face relatively low cost sharing for preferred generic drugs, but higher amounts for generics not on the preferred tier. One-half of Part D enrollees (both PDP and MA-PD enrollees) pay $0 for preferred generics in 2021, but many pay $10 or more per prescription for generics that are not on the preferred tier (Figure 6). For preferred generics, 56% of PDP enrollees and 45% of MA-PD enrollees have a $0 copayment, while 44% of PDP enrollees and 51% of MA-PD enrollees face prescription copayments greater than $0 but less than $6. For generic drugs that are not on the preferred generic tier, most PDP enrollees (86%) pay less than $10, while more than half of MA-PD enrollees (60%) pay between $10 and $20. (We did not compare which specific drugs are covered on each tier in PDPs and MA-PDs, which would also influence enrollees’ out-of-pocket costs.)

For non-preferred drugs, most MA-PD enrollees face copayments while most PDP enrollees face coinsurance; for preferred brands, copayments are more common than coinsurance for enrollees in both types of plans. For preferred brands, 57% of PDP enrollees pay monthly copayments less than $45, while 69% of MA-PD enrollees pay $45 to $47. For drugs on the non-preferred tier (which can be all brands or a mix of brands and generics), virtually all PDP enrollees pay coinsurance between 25% and 50% in 2021, while most MA-PD enrollees (83%) pay copayments between $90 and $100. The maximum cost-sharing amount permitted by CMS is $47 or 25% for preferred brands and $100 or 50% for non-preferred drugs in 2021.

A larger share of MA-PD enrollees than PDP enrollees face the maximum 33% coinsurance rate for specialty tier drugs. For specialty tier drugs, defined by CMS as those that cost at least $670 per month, a much larger share of MA-PD enrollees than PDP enrollees are in a plan that charges the maximum 33% coinsurance (54% vs. 14%), while a much larger share of PDP enrollees than MA-PD enrollees are in a plan that charges the minimum 25% coinsurance (66% vs. 7%). Only those plans that waive some or all of the standard deductible are permitted to set the specialty tier coinsurance rate above 25%. Most PDP enrollees are in plans that charge the standard $445 deductible in 2021, while most MA-PD enrollees are in plans that charge either no or a lower deductible.