Four or more tiers common among PDPs and MA-PD plans














In a notable departure from the commercial marketplace, the most common pharmacy benefit structure among Prescription Drug Plans (PDPs) and Medicare Advantage-Prescription Drug plans (MA-PDs) under Medicare Part D is a four-tier structure, according to the report "Understanding the 2006 Medicare Part D Marketplace."

The report says that at least 51 percent of stand-alone PDPs and at least 63 percent of MA-PD plans have at least four coverage tiers, compared with an average of three tiers for commercial plans.

"This is reflective of the willingness of these plans to enter this new marketplace and to control costs," says Lindsey Spindle, a spokeswoman for Avalere Health, the consulting company that issued the report. "If plans are placing drugs in the fourth tier, it's clearly an attempt to control costs. We're seeing that, along with the use of prior authorization, step therapy, an increase in generic utilization, or some other cost control means," says Spindle.

In general, lower tiers tend to have flat copayment amounts and higher tiers carry a percentage coinsurance; overall cost-sharing amounts are high relative to commercial offerings. Beneficiaries will face significant cost sharing increases when buying products in higher tiers.

"For beneficiaries, this is such new territory," says Spindle. "People will choose their plan based on premium price and then drug coverage. But what happens in the future, if the beneficiary needs a drug that is in a higher tier? They could be in for a surprise," Spindle says.

Among PDPs and MA-PD plans, four or more tiers is very common.

Source: Avalere Health

Career Opportunities

HAP, a subsidiary of Henry Ford Health System, is a nonprofit health plan providing coverage to individuals, companies and organizations. This executive develops strategies to meet membership and revenue targets through products, pricing, market segmentation and advertising.  Aligns business among Business Development, Commercial Sales, Medicare and Public Sector Programs and Product Development. Seeks to enhance and be responsible for business development and expansion through the development of an effective product portfolio, strong interpersonal relationships and service excellence.

Apply via email to jfedder1@hfhs.org or online at http://p.rfer.us/HENRYFORDlXqAJA

Subscribe to Our Newsletters

Monthly table of contents

Be notified as each issue of Managed Care is available online.

Biweekly newsletter

Recent topics have included:

PTCommunity news

New drug approvals, clinical trials, drug management. Three times per week.

UP NEXT

Managed Care
By Peter Wehrwein
Managed Care
By Howard Wolinsky