Report examines Medicare Part D trends since 2006

Seventy-one percent of Medicare beneficiaries are enrolled in Medicare Part D plans in 2016, in either stand-alone Part D plans (PDPs) (60 percent) or Medicare Advantage drug (MA-PD) plans (40 percent). A Kaiser Family Foundation (KFF) report examined trends among plans in 2016 and since 2006, analyzing areas including differences between PDP versus MA-PD plans, cost-sharing, and market share among insurers.

Enrollment and availability

In 2006, only 28 percent of beneficiaries were enrolled in MA-PD plans, increasing 12 percent by 2016. MA-PD plans sponsored by local firms play a larger role in that market segment than PDPs sponsored by local firms. At 886 in 2016, the number of available PDPs is lower than it has ever been. On average, 26 PDP plans are available to beneficiaries, compared to 55 in 2007. Sixteen MA-PD plans are available, on average.

Premiums, deductibles, and cost sharing

Premiums vary widely across plans, even among those offering an equivalent type of benefits. For example, basic benefit PDP premiums range from $11.40 to $139.70. They vary based on geography; the average basic benefit PDP monthly premium in New Mexico is $ 17.05, for example, compared to $37.13 in New Jersey. Average national monthly PDP premiums have increased by 6 percent since 2015 to $39.21, while MA-PD plan premiums have risen only modestly to $16.99.

While most PDP and MA-PD plans have five-tier formularies, tiered pharmacy networks, enhanced benefits, no additional gap coverage, and deductibles less than the standard $360 amount, more PDP enrollees are enrolled in plans with tiered pharmacy networks and more MA-PD plan enrollees are enrolled in plans with deductibles less than $360. In 2006, most enrollees were enrolled in plans with only three or four tiers, whereas in 2016, 98 percent of PDP enrollees and 96 percent of MA-PD plan enrollees participate in multi-tiered plans.

Coinsurance is becoming more common in PDPs, as 31 percent of enrollees pay coinsurance for preferred brand drugs and 96 percent pay coinsurance for non-preferred brand drugs. Still, almost all PDPs and MA-PD plans charge copayments for generic tiers. Most MA-PD plans use copayments for all tiers other than the specialty tier.

Market concentration

Market concentration has increased modestly since 2006, particularly among PDPs. UnitedHealth, Humana, and CVS Health enrolled 52 percent of all Part D participants in 2016. Should Aetna acquire Humana, the resulting company would account for 26 percent of all Part D enrollment in 2016, although it would account for 40 to 50 percent of enrollment in seven specific regions. If the both the Aetna-Humana and Anthem-Cigna mergers go through, 23 of 34 regions would be considered highly concentrated.


Some senators would like to take action to stabilize the amount of money that rural pharmacies pay for Part D prescriptions. Senators Shelley Moore Capito (R-WVa) and Jon Tester (D-Mont) noted that some Medicare Part D sponsors and pharmacy benefit managers have begun retroactively imposing fees on pharmacists weeks and months after prescriptions were filled. The Improving Transparency and Accuracy in Medicare Part D Drug Spending Act (H.R. 5951) would prohibit such retroactive fees with respect to accurate claims.