Legislation looks to reduce Part D costs for Medicare beneficiaries

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This week, U.S. Senators Tom Carper (D-DE) and Bill Cassidy, MD (R-LA) introduced The PACE Part D Choice Act, which seeks to eliminate a significant financial disincentive for Medicare-only beneficiaries to enroll in Programs of All-Inclusive Care for the Elderly, or PACE.

While a notable cost disparity already existed for PACE Part D coverage for Medicare-only beneficiaries, the passage of the Inflation Reduction Act and the $2,000 out-of-pocket cap for Part D has significantly exacerbated the situation, according to the National PACE Association (NPA).

The policy solution in the legislation has been cited by non-partisan think tanks, including in a recent Bipartisan Policy Center report, as a potential answer to the crisis of being able to provide care outside nursing homes for the country’s elderly population.

WHAT’S THE IMPACT

Although many PACE participants are eligible for Medicare and Medicaid, for those who do not qualify for Medicaid, their average monthly Part D plan premium costs of $1,015 in 2022 are considerably higher – more than 20 times higher – than the $43 average monthly cost of a marketplace plan.

The PACE Part D Choice Act would increase access to PACE for Medicare-only beneficiaries by enabling them to choose between the PACE Part D plan or a marketplace Part D plan, which is likely to have fewer total costs with a lower premium and related deductible and coinsurance amounts.

“This bill ensures patients in the PACE program have the same access to lower premiums and affordable prescription drugs that lead to better health outcomes as those in other Medicare programs,” said Cassidy.

The legislation has drawn praise from the National PACE Association.

“PACE is a proven model of care for the elderly, and it has continued to demonstrate its benefits even more profoundly during the pandemic,” said NPA President and CEO Shawn Bloom. “But widespread enrollment in PACE for the millions of Medicare-only beneficiaries who could benefit faces a significant financial obstacle – the high Part D premium cost.”

The House companion, H.R. 4941, was introduced last year by U.S. Reps. Earl Blumenauer (D-OR4), Jackie Walorski (R-IN2), Debbie Dingell (D-MI12) and Christopher Smith (R-NJ4).

THE LARGER TREND

Currently, 148 PACE programs operate at least 309 PACE centers in 32 states, serving more than 62,000 participants. 

PACE programs use an interdisciplinary team approach to keep older adults with long-term care needs healthy and cared for around the clock while living independently in their own homes. Enrollees receive care at home, are transported to their local PACE center and other appointments, and visit the center to socialize, receive therapy and other services, and see a physician.

According to an AARP report, “evidence of PACE’s impact on Medicare and Medicaid costs is unequivocal. A 2021 study of PACE beneficiaries who were eligible for both Medicare and Medicaid found that they were less likely to be hospitalized, less likely to visit the emergency department, and much less likely to be institutionalized than their similar, dually eligible peers enrolled in Medicare Advantage Plans. … PACE improves the LTSS system by reducing institutionalizations, improving outcomes, decreasing costs, and empowering older adults to live at home.”
 

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