CMS Part D Premium Stabilization Program to Expire After 2026: Revisiting Our Part D Thesis and Implications

研报英文原文证据摘录

CMS Part D Premium Stabilization Program to Expire After 2026: Revisiting Our Part D Thesis and Implications

Goldman Sachs Americas Managed Care

expiration of the PDP stabilization subsidies could result in meaningful premium

increases for many Medicare beneficiaries in 2027, creating the potential for

significant member behavior changes. Based on Administration estimates,

approximately 45% of Part D beneficiaries could face monthly premium increases of

$11-$20, representing roughly a 30%-55% increase relative to the current average

beneficiary premium of approximately $36 per month. We believe these changes

could drive enrollment migration toward lower-cost products, increase adverse

selection risk, accelerate shifts toward MAPD plans, and potentially leave some

beneficiaries without prescription drug coverage altogether. From an investor

perspective, the key question is whether the PDP market begins to experience a

similar acuity dynamic to what insurers have reported in both the Managed Medicaid

and ACA exchange markets in recent years, where disproportionate enrollment

growth among higher-utilizing members has pressured margins and increased

earnings volatility.

n CNC most exposed by a significant margin: Among the names in our coverage, we

view CNC as the name that is most significantly expanding its financial exposure to

the increased risk associated with the new PDP market structure. Indeed, we project

that CNC’s PDP premium revenue will jump by nearly 600% over just a two-year

period since the IRA changes went into effect. Specifically, we model CNC’s PDP

premium revenue growing to ~$26.4 billion in 2026 from less than $2 billion in 2023,

and reaching $30.4 billion by 2028. However, we would note that the P&L impact of