UnitedHealthcare Adds Deductibles to Medicare Part D for 2025

Medicare Part D program redesign created by the Inflation Reduction Act is leading UnitedHealthcare to add deductibles to certain formulary tiers, the insurer said. The Inflation Reduction Act, or IRA, which was passed in 2022, includes several provisions that change the Medicare Part D program design.

“While these changes may help members limit their drug costs, Part D plans will now be responsible for covering more of the drug costs,” a company spokesperson said.

UnitedHealthcare is focused on providing stability for prescription drug coverage, the spokesperson said. “By adding Part D prescription deductibles to certain formulary tiers, we are able to maintain stable copays on tier 1 and tier 2 drugs, which account for nearly 90% of our Medicare Advantage Prescription Drug members’ drug claims,” she said.

Two elements of the Inflation Reduction Act — the Medicare Prescription Payment, or “smoothing” plan, and the $2,000 cap on out-of-pocket costs for Part D plans — go into effect in 2025. The smoothing program allows beneficiaries to pay for high-cost drugs on a monthly basis.

The smoothing program has received less attention than other elements of the Inflation Reduction Act. But the limit on out-of-pocket costs and the prescription payment plan are expected to shift Part D drug costs from beneficiaries to plans — from 15% to 60% of drug costs in the catastrophic coverage phase, according to a paper published last year in HealthAffairs.

Related: Payers to Increase Utilization Management if the IRA Leads to Higher Costs

Earlier this year, in a survey by Magnolia Market Access, payers expressed concern about what these changes will mean. Many in the survey said they expected to tighten formularies and increase clinical criteria for coverage. Respondents in this survey said they plan to target a variety of high-spend drug classes, including diabetes, oncology, immunology and rare diseases.

UnitedHealthcare’s 2025 MA Changes

In addition to deductibles in Part D plans, UnitedHealthcare is adding 140 new Medicare Advantage offerings in 2025. The insurer’s Dual Special Needs Plans (D-SNPs) will expand to reach 135,000 additional dual-eligible consumers. This offering includes plans in two new states: New Mexico and North Dakota. Additional, UnitedHealthcare is expanding its footprint for D-SNPs in 85 new counties in 11 states (Colorado, Kansas, Michigan, Montana, Nebraska, New Mexico, North Carolina, North Dakota, Oklahoma, South Dakota and Utah.)

The Dual Special Needs Plans are available for members who qualify for Medicare and Medicaid and offer benefits designed to help members address their unique health and social barriers, such as food and housing instability and access to care. About 12.9 million people received health coverage under both Medicare and Medicaid in 2021, according to KFF.

Additionally, the company will nearly double the reach of its Chronic Special Needs Plans (C-SNPs) for those beneficiaries with severe or disabling chronic conditions, including diabetes, chronic heart failure and cardiovascular disease. UnitedHealthcare will be expanding these plans in 16 new states, and expanding its footprint in almost 1,000 new counties in 28 states.

About two-thirds of Medicare enrollees have multiple chronic conditions requiring coordination of care among primary providers and specialists, inpatient and outpatient facilities and ancillary services, according to the Centers for Medicare & Medicaid Services.

Company officials said the standard plan portfolio will include new options in select markets. CareFlex is a new plan for 2025, reaching eligible members in Arizona, Florida, Illinois, Missouri, Massachusetts, Rhode Island, Texas and Wisconsin. The CareFlex plan offers a quarterly credit on a Visa debit card, which can be used for out-of-pocket costs for Medicare-covered Parts A/B services.

“Essentials” and “Extras” plans will expand to new markets in Colorado, Georgia, Missouri, Nebraska, Nevada, Oregon, South Carolina and Washington. These plans tailor benefits to varied consumer needs and priorities. The Essentials plans focus on prioritizing either competitive core medical and prescription benefits, and the Extras plans focus on ancillary services such as dental, vision and nonprescription products.

Medicare Advantage Prescription Drug (MAPD) “Access” plans will be offered to eligible members in Arizona, Montana, North Carolina, Tennessee, Virginia and Washington as a higher-premium option offering first-dollar coverage in- and out-of-network.

Medicare annual enrollment runs from Oct. 15, 2024, to Dec. 7, 2024.