A new study from the USC Schaeffer Center shows that out-of-pocket costs for brand-name medications have increased sharply for Medicare Part D patients. This is because more drug plans are tying patient costs to the full list price of medications instead of using fixed copayments.
Why are costs rising?
- In 2020, only 9.9% of stand-alone Medicare drug plans used coinsurance (where patients pay a percentage of a drug’s list price).
- By 2024, that number jumped to 71.9%.
- Patients in these plans are now paying more as drug list prices continue to rise.
While drugmakers offer rebates and discounts, these savings usually benefit insurance companies and pharmacy benefit managers (PBMs), not patients. In fact, large rebates may even drive higher list prices, making things worse for those on coinsurance.
Big cost increases for popular drugs
For patients in stand-alone Part D plans, out-of-pocket costs more than doubled for several widely used medications, including:
- Eliquis (blood thinner): from $46.76 to $102.32 per month.
- Trulicity (diabetes): from $54.04 to $128.43 per month.
- Xarelto (blood clots): from $46.54 to $94.50 per month.
- Ozempic (diabetes/weight loss): from $56.95 to $135.43 per month.
Patients in Medicare Advantage plans, which offer more comprehensive coverage, saw only small cost increases in comparison.
Impact on patients
Many seniors are shocked by sudden price jumps for medications they’ve been taking for years. While Medicare’s new out-of-pocket cap will help reduce total yearly expenses, some patients may struggle with high upfront costs—potentially leading them to skip medications and risk their health.
Lead researcher Erin Trish warns, “Medicare beneficiaries taking highly rebated drugs are paying more while generating savings for insurers. That’s the opposite of how insurance should work.”
The findings highlight the growing financial burden on Medicare patients and the need for reforms to ensure fair pricing and affordable prescriptions.
The full text of the study is available online.