How Medicare Advantage Rebates Disadvantage Medicare’s Stand-Alone Drug Plan Market

Most enrollees in MA-PD plans pay no premium for drug coverage in 2026. ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­  

View in browser The independent source for health policy research, polling, and news. The independent source for health policy research, polling, and news. Analysis Shows How Medicare Advantage Rebates Disadvantage Medicare’s Stand-Alone Drug Plan Market  A new KFF analysis finds the use of Medicare Advantage rebates to reduce Part D premiums is making it harder for Medicare stand-alone prescription drug plans (PDPs) to compete for enrollees on a level playing field -- which may contribute to instability in the PDP market that beneficiaries in traditional Medicare rely on for their drug coverage.   Medicare Advantage plans use rebate payments to provide extra benefits or reduce premiums and cost sharing, which means most enrollees in plans that include drug coverage (known as MA-PD plans) pay no premium for drug coverage in 2026, as in prior years. These Medicare Advantage rebates are unavailable to PDP sponsors, although PDP sponsors are receiving temporary premium subsidies that are unavailable to MA-PD sponsors under the PDP Premium Stabilization Demonstration. These subsidies have helped to limit PDP premium increases tied to the redesign of the Part D benefit under the Inflation Reduction Act.   The analysis finds that, on a per member per month basis, the amount of rebates used by Medicare Advantage plans to buy down MA-PD Part D premiums in 2026 is projected to be over three times greater than the amount of premium subsidies to PDPs under the temporary premium stabilization demonstration—$53 for MA-PDs vs. $16 for PDPs. (These projections are based on 2025 Part D enrollment and do not factor in new plans, plan switching, or new enrollment for 2026.)   The total federal cost of Medicare Advantage rebates used to buy down Part D premiums is projected to reach $13 billion in 2026—more than three times the estimated $3.6 billion cost of temporary subsidies provided to PDP sponsors through the stabilization demonstration.   The uneven level of premium subsidies available in each market, along with higher plan costs for all plan sponsors under the redesigned Part D benefit, are likely factors behind changes in Part D plan availability in recent years, including a sharp reduction in the number of stand-alone PDPs that pair with traditional Medicare. Today, beneficiaries have nearly three times as many MA-PD options as PDP options on average—32 MA-PDs compared to 11 PDPs—reversing the market dynamics from five years ago, when PDPs outnumbered MA-PDs.   Also newly available from KFF is related analysis of Medicare Part D enrollment, premiums, and cost sharing in 2026 and trends over time, based on data from the Centers for Medicare & Medicaid Services. Read the analysis Contact: Chris Lee | 202.654.1403 | ChrisL@kff.org   When citing our work, please note our legal name is KFF. We should be cited as KFF, a nonprofit health policy research, polling, and news organization. Our name is no longer the Kaiser Family Foundation.  Did someone forward this to you? Sign up for emails from KFF. This email was sent to albarkahslamet.ssss@blogger.com. Update your email preferences to choose the types of emails you receive. Or, permanently unsubscribe from all future emails. Need assistance? Email subscriptions@kff.org; do not reply to this email. The independent source for health policy research, polling, and news. KFF, 185 Berry Street, Suite 2000, San Francisco, CA 94107