Medicare’s spending on breakthrough medications for hepatitis C is expected to double this year, passing $9 billion, according to new government figures. The drastic increase in spending is expected to raise insurance costs for all beneficiaries, whether or not they have the liver-wasting viral disease.
Medications for Hepatitis C to Account for Nearly 7% of Part D Spending in 2015
New cost estimates indicate that Medicare Part D, Medicare’s prescription drug program will spend $9.2 billion on hepatitis C drugs alone this year, a 96% increase from $4.7 billion in 2014. That works out to nearly 7 percent of drug costs for all of Medicare Part D.
The reason for the increase in spending is largely due to changes in Medicare’s population. More than three out of four adults infected with hepatitis C belong to the “baby boomer” generation- the age group now entering Medicare. Hepatitis C affects an estimated 3 million people in the United States, claiming more lives here than AIDS. It’s primarily spread by contact with infected blood. Symptoms of hepatitis C are reported as being similar to a bad flu that never goes away. While the disease advances gradually, it can ultimately destroy the liver, requiring a transplant to save the patient’s life. The new drugs cure the disease but treatment can cost from $80,000 to $100,000.
Medicare’s economic analysts report that hepatitis C drugs are one of the reasons for cost increases for Medicare Part D, lending to a cost per beneficiary increase of 7.9% this year. Next year Medicare’s costs for hepatitis C are expected to ease up due to an increase of competition from more medications entering the market, as well as expected rebates from drug manufacturers.
Until then, Medicare beneficiaries can expect to see rising premiums and deductibles. In 2016, the prescription program’s standard deductible is going up by $40, to $360. It’s by far the largest increase in the deductible since the inception of Part D 10 years ago. However, as Medicare Part D is offered by multiple different private insurance companies and rates vary, it is difficult to give an estimation of premium and other deductible rate increases.