New Study: Medicare Part D Low-Income Subsidy Plans Are Eroding with More Than Half of Enrollees Paying Premiums Today

WASHINGTON, July 24, 2024 /PRNewswire/ -- Today, the National Hispanic Council on Aging released an analysis from Avalere which found that the Inflation Reduction Act (IRA) has sped up the erosion of the low-income subsidy (LIS) plans offered under Medicare Part D, leading to the largest decrease to date in zero-dollar premium plans available for low-income seniors and individuals with disabilities.

The LIS program allows Medicare beneficiaries with limited incomes and assets, defined as an income of about $22,500 in 2024 for a single individual and about $30,500 for a couple, to enroll in zero-dollar premium Part D plans known as "benchmark plans" to help them access their medicines.

According to the Avalere analysis, which was commissioned by the National Hispanic Council on Aging, the number of these LIS plans with zero-dollar premiums decreased by over one-third in the past year. As a result, more than 1 million more low-income seniors and people with disabilities are now paying premiums, amounting to more than half of all LIS enrollees in 2024.

"It's alarming that Part D plans that are premium-free to Part D enrollees receiving the low-income subsidy are disappearing," said Dr. Yanira Cruz, president and CEO of the National Hispanic Council on Aging. "Nearly 13 million Americans count on the Low-Income Subsidy Program to furnish them with affordable drug coverage. The Centers for Medicare & Medicaid Services (CMS) must ensure that implementation of the IRA does not contribute to low-income beneficiaries losing access to low-cost, zero-premium drug plans."

Avalere investigated the availability of zero-dollar premium plans -- and found that the number of plan options has been declining. The number of benchmark plans decreased by 15% on average between 2020 and 2024, but fell 34% between 2023 and 2024.

The dwindling availability of zero-dollar premium plans may have negative consequences for public health, given that older, low-income adults are more likely to have health problems that could be managed with medication, including diabetes and heart disease.

The decline of zero-dollar premium plans has hit beneficiaries from marginalized communities particularly hard. One in five Black beneficiaries and about one in six Hispanic beneficiaries rely on the program for drug coverage.

In recent years, changes in the landscape and availability of plans, broader Medicare enrollment patterns, and other policy rules have shifted enrollment patterns of LIS enrollees. More recent policy and market changes have led to fewer LIS benchmark options in 2024 and more LIS enrollees paying premiums for their Part D coverage. As the most significant Inflation Reduction Act Part D benefit changes go into effect in 2025, the potential for even larger changes in plan offerings and enrollment are likely to have important access and affordability implications for LIS enrollees.

"Millions of Americans are only able to access life-saving medication because of the Low-Income Subsidy Program," Dr. Cruz said. " CMS has a responsibility to ensure the most vulnerable beneficiaries have access to their vital medications. They must not be collateral damage in the IRA's transformation of the Part D program."

To schedule an interview with Dr. Yanira Cruz, president and CEO of the National Hispanic Council on Aging, please contact Ava Noack at 202-796-5112 or [email protected].

About the National Hispanic Council on Aging
The National Hispanic Council on Aging (NHCOA) is the leading national organization working to improve the lives of Hispanic older adults, their families and caregivers. For more information, visit nhcoa.org.

SOURCE National Hispanic Council on Aging