Effects of Part D Senior Savings Model on healthcare costs among the Medicare population

The Centers for Medicare and Medicaid Services tested the Part D Senior Savings Model (the 'PDSS Model') from 2021 to 2023, capping insulin cost-sharing at $35/month for Medicare beneficiaries in participating plans. The objective of the study was to assess the PDSS Model's effects on various categories of healthcare costs.

This study analysed the US Medical Expenditure Panel Survey (2020-2021). Study outcomes included costs for insulin, all medications, health services, and overall healthcare. Costs were calculated from patient (out-of-pocket) and healthcare sector perspectives. A difference-in-differences approach was implemented using generalized linear regression to compare cost changes from 2020 to 2021 between Medicare beneficiaries aged 65 and older and near-elderly non-Medicare individuals with private insurance.

Compared to non-Medicare patients, Medicare beneficiaries in general experienced higher reductions in out-of-pocket costs over time: 29% for insulin (cost ratio [CR] = 0.71, 95% confidence interval [CI] = 0.56-0.90), 66% for health services (CR = 0.34, 95% CI = 0.26-0.44), and 49% for overall healthcare (CR = 0.51, 95% CI = 0.34-0.77). For total costs, Medicare beneficiaries had a 41% smaller increase in insulin costs (CR = 0.59, 95% CI = 0.39-0.90) and a 42% smaller increase in medication costs (CR = 0.58, 95% CI = 0.46-0.74). Medicare beneficiaries experienced a 73% greater increase in total health service costs (CR = 1.73, 95% CI = 1.09-2.77).

The PDSS Model was generally associated with reduced out-of-pocket insulin and other out-of-pocket healthcare costs among Medicare beneficiaries, highlighting the value of cost-saving models.