During the Medicare open enrollment period from October 15 to December 7 each year, beneficiaries can enroll in a plan that provides Part D drug coverage, either a stand-alone prescription drug plan (PDP) as a supplement to traditional Medicare, or a Medicare Advantage prescription drug plan (MA-PD), which covers all Medicare benefits, including drugs. Among the 46 million Part D enrollees in 2020, 20.2 million (44%) are in PDPs and 19.3 million (41%) are in MA-PDs (excluding the 7.0 million (15%) in employer-only group PDPs and MA-PDs). This issue brief provides an overview of Medicare Part D drug plans that will be available in 2021 and key trends over time.

Part D Plan Availability

The Average Medicare Beneficiary Has a Choice of Nearly 60 Medicare Plans with Part D Drug Coverage in 2021, Including 30 Medicare Stand-alone Drug Plans and 27 Medicare Advantage Drug Plans

A larger number of Part D plans will be offered in 2021 than in recent years. The average Medicare beneficiary will have a choice of 30 stand-alone PDPs in 2021, two more PDP options than in 2020, and eight more than in 2017, a 36% increase (Figure 1). Although the number of PDP options in 2021 is half of what it was at the peak in 2007 (when there were 56 PDP options, on average), this is the fourth year in a row with an increase in the average number of stand-alone drug plan options.

In 2021, beneficiaries will also have access to 27 MA-PDs, on average, a 71% increase in MA-PD options since 2017 (excluding Medicare Advantage plans that do not offer the drug benefit and plans not available to all beneficiaries; overall, an average of 33 Medicare Advantage plan options will be available in 2021).

Based on September 2020 enrollment, 8 out of 10 PDP enrollees (80%) in 2021 are projected to be in PDPs operated by just four firms: UnitedHealth, Centene (which acquired WellCare in 2020), Humana, and CVS Health (based on PDP enrollment as of September 2020). All four firms offer PDPs in all 34 PDP regions in 2021.

A Total of 996 Medicare Part D Stand-Alone Prescription Drug Plans Will Be Offered in 2021, a 5% Increase From 2020 and a 34% Increase Since 2017

A total of 996 PDPs will be offered in the 34 PDP regions in 2021 (plus another 11 PDPs in the territories), an increase of 48 PDPs (5%) over 2020, and 250 more PDPs (a 34% increase) since 2017 (Figure 2). This increase is primarily due to the Trump Administration’s elimination of the “meaningful difference” requirement for enhanced benefit PDPs offered by the same organization in the same region. Eliminating this requirement means that PDP sponsors no longer have to demonstrate that their enhanced PDPs offered in the same region are meaningfully different in terms of enrollee out-of-pocket costs. In 2021, 62% of PDPs (618 plans) will offer enhanced Part D benefits—a 60% increase in the availability of enhanced-benefit PDPs since 2017, when just over half of PDPs (387 plans) offered enhanced benefits.

The number of PDPs per region in 2021 will range from 25 PDPs in Alaska to 35 PDPs in Texas and will be the same or higher in 32 of the 34 PDP regions compared to 2020 (see map, Table 1).

 

Part D Premiums

The Estimated Average Monthly Premium for Medicare PDPs Is Projected to Increase by 9% to $41 in 2021, Based on Current Enrollment

The estimated national average monthly PDP premium for 2021 is projected to increase by 9% to $41, from $38 in 2020, weighted by September 2020 enrollment (Figure 3). It is likely that the actual average weighted premium for 2021, after taking into account enrollment choices by new enrollees and plan changes by current enrollees, will be somewhat lower than the estimated average. CMS reported that the average premium for basic Part D coverage offered by PDPs and MA-PDs will be an estimated $30 in 2021. Our premium estimate is higher because it is based on PDPs only (excluding MA-PDs) and includes PDPs offering both basic and enhanced coverage (enhanced plans, which account for 62% of all PDPs in 2021, have higher premiums than basic plans, on average).

Average Monthly Premiums for the 21 National Part D Stand-alone PDPs Are Projected to Range from $7 to $89 in 2021, with Higher Average Premiums for Enhanced Benefits and Zero-Deductible PDPs

PDP premiums will vary widely across plans in 2021, as in previous years (Figure 4, Table 2). Among the 21 PDPs available nationwide, average premiums will range from a low of $7 per month for SilverScript SmartRx to a high of $89 per month for AARP MedicareRx Preferred.

Changes to premiums from 2020 to 2021, averaged across regions and weighted by 2020 enrollment, also vary widely across PDPs, as do the absolute amounts of monthly premiums for 2021.

• The 1.9 million non-LIS enrollees in the largest PDP, CVS Health’s SilverScript Choice (which had a total of 3.9 million enrollees in 2020, including those receiving low-income subsidies) will face a modest $1 (2%) decrease in their average monthly premium, from $29 in 2020 to $28 in 2021.

• In contrast, the 1.8 million non-LIS enrollees in the second largest PDP, AARP MedicareRx Preferred, will face a $10 (12%) increase in their average monthly premium between 2020 and 2021, from $79 to $89. This is the highest monthly premium among the national PDPs in 2021.
• The 1.3 million non-LIS enrollees in the fourth largest PDP, Humana Premier Rx, will see a $7 (13%) increase in their monthly premium, from $58 in 2020 to $65 in 2021.

Most Part D stand-alone drug plans in 2021 (62% of PDPs) will offer enhanced benefits for a higher monthly premium. Enhanced benefits can include a lower (or no) deductible, reduced cost sharing, or a higher initial coverage limit than under the standard benefit design. The average premium in 2021 for enhanced benefit PDPs is $51, which is 55% higher than the monthly premium for PDPs offering the basic benefit ($33) (weighted by September 2020 enrollment).

In 2021, a large majority of PDPs (86%) will charge a deductible, with most PDPs (67%) charging the standard amount of $445 in 2021. Across all PDPs, the average deductible in 2021 will be $345 (weighted by September 2020 enrollment). The average monthly premium in 2021 for PDPs that charge no deductible is $88, nearly three times the monthly premium for PDPs that charge the standard deductible ($34) or a partial deductible ($31) (weighted by September 2020 enrollment).

Nearly 8 in 10 Part D Stand-alone Drug Plan Enrollees Without Low-income Subsidies Will Pay Higher Premiums in 2021 If They Stay in Their Current Plan

Most (78%, or 10 million) of the 13.4 million Part D PDP enrollees who are responsible for paying the entire premium (which excludes Low-Income Subsidy (LIS) recipients) will see their monthly premium increase in 2021 if they stay in their same plan, while 2.8 million (21%) will see a premium reduction if they stay in their same plan (Figure 5).

Nearly 2 million non-LIS enrollees (13%) will see a premium increase of $10 or more per month, while significantly fewer (0.2 million non-LIS enrollees, or 1%) will see a premium reduction of the same magnitude. One-third (34%) of non-LIS enrollees (4.6 million) are projected to pay monthly premiums of at least $60 if they stay in their current plans, and more than 230,000 (2% of non-LIS enrollees) are projected to pay monthly premiums of at least $100.

The Average Monthly Part D Premium in 2021 for the Subset of Enhanced Stand-alone Drug Plans Covering Insulin at a $35 Monthly Copay Is Substantially Higher Than Premiums for Other PDPs

New for 2021, beneficiaries in each state will have the option to enroll in a Part D plan participating in the Trump Administration’s new Innovation Center model in which enhanced drug plans cover insulin products at a monthly copayment of $35 in the deductible, initial coverage, and coverage gap phases of the Part D benefit. Participating plans do not have to cover all insulin products at the $35 monthly copayment amount, just one of each dosage form (vial, pen) and insulin type (rapid-acting, short-acting, intermediate-acting, and long-acting).

In 2021, a total of 1,635 enhanced Part D plans will participate in this model, which represents just over 30% of both PDPs (310 plans) and MA-PDs (1,325 plans) available in 2021, including plans in the territories. Between 8 and 10 enhanced PDPs in each region are participating in the model, in addition to multiple MA-PDs (see map). The average premium in 2021 for the subset of enhanced PDPs participating in the insulin $35 copay model ($59) is nearly twice as high as the monthly premium for basic PDPs ($33) and 61% higher than the average premium for enhanced PDPs that are not participating in the model ($37) (weighted by September 2020 enrollment).

 

Part D Cost Sharing

Part D Enrollees Will Pay Much Higher Cost-Sharing Amounts for Brands and Non-preferred Drugs Than For Drugs on a Generic Tier, and a Mix of Copays and Coinsurance for Different Formulary Tiers

In 2021, as in prior years, Part D enrollees will face much higher cost-sharing amounts for brands and non-preferred drugs (which can include both brands and generics) than for drugs on a generic tier, and a mix of copayments and coinsurance for different formulary tiers (Figure 7). The typical five-tier formulary design in Part D includes tiers for preferred generics, generics, preferred brands, non-preferred drugs, and specialty drugs. Among all PDPs, median standard cost sharing in 2021 is $0 for preferred generics and $5 for generics (an increase from $4 in 2020), $40 for preferred brands (a decrease from $42 in 2020), 40% coinsurance for non-preferred drugs (an increase from 38% in 2020; the maximum allowed is 50%), and 25% coinsurance for specialty drugs (the same as in 2020; the maximum allowed is 33%).

Among the 21 national PDPs, 13 PDPs, covering 9.3 million enrollees as of September 2020, are increasing cost-sharing amounts for drugs on at least one formulary tier between 2020 and 2021 (Table 3). Five PDPs are increasing copayments for generics, with increases ranging from $1 to $4; six PDPs are increasing copayments for preferred brands, with increases ranging from $3 to $10; and 10 PDPs are increasing coinsurance for non-preferred drugs, with increases ranging from 2 percentage points (e.g., from a 38% coinsurance rate to 40%) to 14 percentage points (e.g., from a 35% coinsurance rate to 49%).

Low-Income Subsidy Plan Availability

In 2021, 259 Part D Stand-Alone Drug Plans Will Be Premium-Free to Enrollees Receiving the Low-Income Subsidy (Benchmark Plans)

In 2021, a larger number of PDPs will be premium-free benchmark plans—that is, PDPs available for no monthly premium to Medicare Part D enrollees receiving the Low-Income Subsidy (LIS)—than in recent years, with 259 premium-free benchmark plans, or roughly a quarter of all PDPs in 2021 (Figure 8). Through the Part D LIS program, enrollees with low incomes and modest assets are eligible for assistance with Part D plan premiums and cost sharing. As of 2020, approximately 13 million Part D enrollees are receiving LIS, including 6.7 million (52%) in PDPs and 6.1 million (48%) in MA-PDs.

On average (weighted by Medicare enrollment), LIS beneficiaries have eight benchmark plans available to them for 2021, or about one-fourth the average number of PDP choices available overall. All LIS enrollees can select any plan offered in their area, but if they enroll in a non-benchmark plan, they must pay some portion of their chosen plan’s monthly premium. In 2021, 10% of all LIS PDP enrollees who are eligible for premium-free Part D coverage (0.6 million LIS enrollees) will pay Part D premiums averaging $33 per month unless they switch or are reassigned by CMS to premium-free plans.

The number of benchmark plans available in 2021 will vary by region, from five to 10 (see map). In 2020, 89% of the 6.6 million LIS PDP enrollees are projected to be in PDPs operated by five firms: CVS Health, Centene, Humana, UnitedHealth, and Cigna (based on 2020 enrollment).

 

Discussion

Our analysis of the Medicare Part D stand-alone drug plan landscape for 2021 shows that millions of Part D enrollees without low-income subsidies will face premium and other cost increases in 2021 if they stay in their current stand-alone drug plan. There are more plans available nationwide in 2021, with Medicare beneficiaries having 30 PDP choices during this year’s open enrollment period, plus 27 Medicare Advantage drug plan options. Most Part D PDP enrollees who remain in the same plan in 2021 will be in a plan with the standard $445 deductible and will face much higher cost sharing for brands than for generic drugs, including as much as 50% coinsurance for non-preferred drugs.

Some Part D enrollees who choose to stay in their current plans may see lower premiums and other costs for their drug coverage, but nearly 8 in 10 non-LIS enrollees will face higher premiums if they remain in their current plan, and many will also face higher deductibles and cost sharing for covered drugs. Some beneficiaries might find the best coverage and costs for their specific medications in a plan with a relatively low premium, while for other beneficiaries, a higher-premium plan might be more suitable. Because Part D plans vary in a number of ways that can have a significant effect on an enrollee’s out-of-pocket spending, beyond the monthly premium, all Part D enrollees could benefit from the opportunity to compare plans during open enrollment.

 

Long-term care facilities, such as nursing homes, have experienced a disproportionate share of deaths during the COVID-19 pandemic. The most recently available data show long-term care facilities account for 8% of all coronavirus cases but more than 40% of all COVID-19 deaths. Overall, COVID-19 has taken a disproportionate toll on communities of color. Black, Hispanic, and American Indian and Alaska Native (AIAN) populations have been shown to be at increased risk for cases, deaths, and hospitalizations. However, because the Center for Medicare and Medicaid Services does not require nursing facilities to report race/ethnicity data for COVID-19 cases and deaths, it is not possible to document the full scope of the pandemic on communities of color in nursing homes, or other long-term care settings. Only four states report cases and deaths in long-term care facilities by race/ethnicity (Iowa, Indiana, Louisiana, and Mississippi).

In the absence of these data, this analysis uses linked datasets – one with facility-level cases and deaths as of October 11^th and another with 2017 facility-level resident information by race/ethnicity – to examine cases and deaths based on racial/ethnic composition of nursing home residents. Specifically, it assesses whether nursing homes with relatively high shares of Black and Hispanic residents experienced a disproportionate burden of cases and deaths compared to those with lower shares of Black and Hispanic residents as well as a higher share of White residents. Data were not available to separately analyze cases and deaths for other racial/ethnic groups. The analysis is based on data from 13,982 nursing facilities nationwide (approximately 93% of all nursing facilities). In addition to national data, we present similar results at the state level, where sufficient data are available. See methods for more details on how nursing homes were categorized, data limitations, and analytic approach.

Deaths and Cases by Resident Race/Ethnicity

Nursing homes with relatively high shares of Black or Hispanic residents were more likely to report at least one COVID-19 death than nursing homes with lower shares of Black or Hispanic residents (Figure 1). Overall, within the 13,982 nursing homes included in this analysis, 12% of all nursing home residents are Black and 6% are Hispanic. Our analysis finds deaths due to COVID-19 were more common among nursing homes with relatively high shares of Black or Hispanic residents (defined in this analysis as 20% or greater). Nationwide, 63% of nursing homes with a relatively high share of Black residents reported one or more COVID-19 death, higher than the share reported by nursing homes with a lower share of Black residents (40%). Similarly, 55% of nursing homes with a relatively high share of Hispanic residents reported COVID-19 deaths, higher than the share reported by nursing homes with a lower share of Hispanic residents (44%).

Nursing homes with relatively high shares of Black or Hispanic residents were more likely to report coronavirus cases than other nursing homes, although the differences are narrower than for reported COVID-19 deaths (Figure 2). Nursing homes with a high share of Black residents were more likely to report coronavirus cases than nursing homes with a low share of Black residents (87% compared to 79%). Similarly, nursing homes with a relatively high share of Hispanic residents were more likely to report coronavirus cases (84%) than nursing homes with a lower share (81%).

Case Outbreak Severity by Resident Race/Ethnicity

Among nursing homes that had at least one case of coronavirus, nursing homes with relatively high shares of Black or Hispanic residents reported more severe case outbreaks than nursing homes with low shares of Black or Hispanic residents, as measured by confirmed or suspected cases as a share of nursing home beds (Figure 3). In nursing homes with a relatively high share of Black residents, positive cases among residents account for 29% of beds, as compared to 25% of beds in nursing homes with a relatively low share of Black residents. Similarly, among nursing homes with a relatively high share of Hispanic residents, positive cases among all residents account for 31% of beds, as compared to 25% of beds in nursing homes with a relatively low share of Hispanic residents.

Cases and Deaths by Resident Race/Ethnicity in Select States

National patterns of COVID-19 deaths and cases in nursing homes with relatively high shares of Black or Hispanic residents generally persist at the state-level, based on data from 21 states. State-level analysis allows for a better understanding of whether observed national racial disparities may be attributed to regional outbreaks and geographic variations in the composition of the population by race/ethnicity. This analysis is limited to the twenty-one states with a sufficient number of nursing homes that had either a high share of Black or Hispanic residents, as described in greater detail in the methods section. Among these states, the experience of nursing homes with a high share of Black or Hispanic residents generally mirrored the national pattern.

In 19 of the 21 states for which there were sufficient data, nursing homes with a relatively high share of Black or Hispanic residents were more likely to report one or more death than other nursing homes in the state (Appendix Table 1). In some instances, these differences were relatively large, some with a gap of 20 percentage points or more. For example, in Florida, the share of nursing homes reporting one or more death due to COVID-19 was substantially higher among nursing homes with a high share of Hispanic residents than in other nursing homes (85% vs 63%). A similar gap between nursing homes with high and low share residents of Black residents was observed in five states (Illinois, Maryland, Michigan, New York, and Pennsylvania), where the gap in the share that reported at least one death was equal to or exceeded 20 percentage points. In Michigan, for example, 64% of nursing homes with a high share of Black residents reported 1 or more death, as compared to 35% in nursing homes with a low share of Black residents. The gap in the share of reported at least one death was not as pronounced in all states. For example, the gap between nursing homes with high versus lower shares of Black residents was fewer than 10 percentage points in Alabama, Florida, and Ohio.

Similarly, differences in the share of facilities that reported at least one case and case severity by resident race/ethnicity seen nationally generally also held in these states. Like the national data, state data shows that nursing homes with relatively more Black or Hispanic residents were more likely to report at least one COVID-19 case, though differences were less pronounced than death patterns; the exception to this pattern is Florida, Louisiana, North Carolina, and South Carolina where nursing facilities with higher and lower shares of Black residents were either equally likely to report at least one case (Florida and South Carolina) or facilities with a lower share of Black residents were slightly more likely to report a case (Louisiana and North Carolina).

With respect to the severity of outbreaks at the state level, the pattern observed at the national level was generally evident at the state level. However, in a few states, including Arkansas, Georgia, Louisiana, New Jersey, Ohio, and South Carolina, facilities with low shares of Black residents had equal or slightly more severe outbreak severity as facilities with high shares of Black residents.

Discussion

These findings confirm that nursing homes with a relatively large share of Black or Hispanic residents have been disproportionately affected by COVID-19, as measured by the share reporting deaths, share reporting cases, and the severity of outbreak.  This analysis amplifies prior research that finds that the coronavirus has disproportionately impacted communities of color, including residents in nursing homes, potentially reflecting patterns of community transmission or nursing home quality. Research supports a strong relationship between nursing home cases and community transmission. There have been more mixed results when evaluating the relationship between nursing homes coronavirus outbreaks and nursing home quality, with some research finding a relationship and some not. Nursing homes are now required by the Center for Medicare and Medicaid services to report cases and deaths on a regular basis, but they are not required to report the data by race and ethnicity, and few states include such information in their own public reporting; such information is needed to document the direct impact of the pandemic on older residents of color, and the underlying factors that drive these disparities. Even without such data, this analysis makes it clear that residents in facilities that serve a relatively large share of Black and Hispanic residents have been disproportionately affected by the coronavirus.

Data Sources

This analysis draws on federal data published by the Center for Medicare and Medicaid Services (CMS)and additional facility-level data from Brown School of Public Health’s LTCfocus.org data, which includes summary-level information derived from 2017 MDS (Minimum Dataset) data.

data on cases and deaths

Data on coronavirus cases and deaths in nursing homes is from federal data published by the Center for Medicare and Medicaid Services (CMS). CMS requires all Medicare and Medicaid certified nursing facilities to report data on suspected and confirmed coronavirus cases and deaths for residents and staff. These data collection standards make the federal data more comparable across states than state-published data. Data in this paper reflects nursing home cases and deaths as of October 11, 2020. A major limitation of this data is the time period included: facilities were only required to report data starting May 8^th, 2020 and reporting cases or deaths prior to that date was not required. Thus, data may not be counting cases or deaths in facilities or states that experienced outbreaks earlier in spring 2020. For more information on the federal data, see KFF analysis comparing the state-reported data to the federal data.

In addition, some nursing homes in the CMS data report a greater number of cases and/or deaths than the total number of beds in the nursing home. We dropped approximately 1,000 nursing homes for which this was the case, leading to a final sample of 13,982 nursing homes. This sample is a subset of the approximately 15,000 nursing homes in the US.

Data on Race/Ethnicity of Residents

CMS does not require nursing facilities to report cases and deaths by race/ethnicity. Therefore, facility-level data on resident race/ethnicity was pulled from Brown School of Public Health’s LTCfocus.org data, which includes summary-level information derived from 2017 MDS (Minimum Dataset) data. MDS assessments are completed for all residents in nursing homes to identify each resident’s functional capabilities and help nursing home staff identify health problems. Demographic data, including race/ethnicity, is collected during this process as well. Brown School of Public Health provides summary data of MDS from 2010-2017, including facility-level data on the share of nursing home residents who are Black, White, or Hispanic. This analysis does not include data on staff cases and deaths since MDS does not collect data on racial makeup of nursing home staff, and we were unable to identify a data source for race/ethnicity of nursing home staff at the facility level.

The LTCfocus.org data censors data points representing fewer than 11 residents due to privacy standards set forth by CMS. Due to the small number of Black or Hispanic residents in many nursing homes, this created missing data points in nearly 9,000 nursing homes. For these “missing” data points, we imputed a value of 5.5 residents and calculated shares of residents based on the newly imputed value. We conducted a sensitivity analysis that showed that results were largely unchanged when the sample included and excluded the nursing homes with imputed data.

Classifying Facilities by Resident Race/Ethnicity

Overall, within the 13,982 nursing homes included in this analysis, 12% of all nursing home residents are Black and 6% are Hispanic. Nursing homes have a disproportionately low share of Hispanic residents when compared to total US population distribution by Race/Ethnicity. We categorized nursing homes where 20% or more of residents were Black or Hispanic as “High Share of Black Residents” or “High Share of Hispanic Residents.” This definition is based on the distribution of share of Black and Hispanic residents among the 13,982 nursing homes in our sample and a need to have adequate sample within each group. Many nursing homes reported extremely low shares of Black or Hispanic residents or zero Black or Hispanic residents. The following are the Ns for the groups reported in the paper:

Residents may be double counted in race/ethnicity data (for example, a resident could be counted as both “White” and “Hispanic”). Therefore, some facilities with a “high” share of Black or Hispanic residents may overlap with facilities with a “high” share White residents.

Choosing States for State-Level Analysis

State-level analysis was limited to the states with 50 or more facilities in the high share of Black or Hispanic residents categories, based on our definitions of “high share” described above. In total, we were able to provide state-level data on 21 states. California, Florida, New York, and Texas each had 50 or more nursing homes with a high share of both Black and Hispanic residents, and the remaining 17 states in the analysis had only a sufficient number of nursing homes with a high share of Black residents.