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The Goodman Institute Health Blog

How Medicare Advantage Plans Cover Drugs

Posted on July 5, 2023July 5, 2023 by John C. Goodman

Average annual deductibles in independent prescription drug plans (PDPs) are roughly four times higher than those in Medicare Advantage plans (MA-PDs) ($398 versus $90). Average monthly premiums for PDPs are also roughly 3.5 times higher than in MA-PDPs ($40 versus $11). Similarly, MA-PDP formularies cover a higher share of potentially coverable Part D drugs than PDPs (89 percent compared to 83 percent). At the same time, MA-PDPs impose utilization management requirements (such as prior authorization and quantity limits) on formulary covered drugs at a lower rate, relative to PDPs.

Source: Benedic N. Ippolito and Boris Vabson, The Impact Of Medicare Advantage Growth On Part D Competition, Costs, and Coverage. (AEI)

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For many years, our health care blog was the only free enterprise health policy blog on the internet. Then, when the NCPA closed its doors, the health blog stopped as well.

During this five-year hiatus no one else has come forward to claim the space. So, my colleagues and I have decided to restart the blog in connection with the Goodman Institute. We invite you and others to use this forum to share your views.

John C. Goodman,

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