Congress Finally Eliminates Part D Vaccine Cost Sharing: Medicare Coverage Is Still Broken

In its passage of the Inflation Reduction Act of 2022, Congress has taken the long overdue step of eliminating out of pocket, or OOP, costs for vaccines under Medicare Part D. The OOP prohibition aligns with policies under Medicare Part B and the Affordable Care Act and removes a pharmacy counter barrier that will undoubtedly lead more seniors to be vaccinated against shingles. However, it leaves intact a peculiar split in Medicare vaccine coverage that discourages physicians from offering certain vaccines.

Brief history of Medicare vaccine coverage

For much of the 20th century, vaccination efforts concentrated on the childhood population, resulting in the successful reduction of morbidity and mortality associated with at least nine infectious diseases.

Following the development of the first vaccines for older adults, like influenza and pneumococcal disease, Congress amended the Medicare statute throughout the 1980s to ensure beneficiary access to these new vaccines and the Hepatitis B vaccine for those beneficiaries at intermediate to high risk of contracting the disease. As it enacted these coverage requirements under Part B, Congress took care to prohibit beneficiary cost sharing so that seniors would not be discouraged from receiving vaccines.

Eventually, in 2003, Congress passed the Medicare Modernization Act, creating Medicare Part D, a prescription drug benefit for seniors. Under the MMA, implemented in 2005, Part D sponsors must cover all commercially available vaccines except those covered under Part B. This inexplicable decision to cover future vaccines under the prescription drug benefit while leaving previous vaccine coverage in Part B created a peculiar split in Medicare vaccine coverage. There is no meaningful clinical distinction between Part B and Part D vaccines that justifies the separation. The result is an unevenness of vaccine coverage and access across settings of care and population segments, which will be perpetuated as new vaccines for older adults are licensed and recommended.

Solving the Part D OOP problem

When the MMA was passed, vaccine OOP costs were only a theoretical problem. Then, in 2005, the first pertussis-containing vaccine for adults was licensed, followed by the first shingles vaccine in 2006. A 2011 GAO report showed that relatively few Medicare beneficiaries received these vaccines, and cost sharing was cited as a barrier to access.

A 2018 Avalere Health analysis I led found that uptake of the shingles vaccine was 40% to 60% higher when a Part D plan offered $0 cost sharing. In 2016, 95% of Part D beneficiaries encountered vaccine cost sharing, with OOP costs averaging $85. Other studies have affirmed that cost sharing is a definite barrier to vaccine access, resulting in lower uptake.