Generic Coverage Could Boost Rx Compliance for Medicare Beneficiaries

Adding coverage for generic drugs during the "doughnut hole" in the Medicare prescription drug benefit could help offset a decreased use of medications during the period, according to a study published Tuesday on the journal Health Affairs' Web site, the Pittsburgh Post-Gazette reports.

Under the Medicare drug benefit, beneficiaries have an initial $250 deductible for prescriptions, then a 25% copayment until they reach $2,250 in payments. At this point, the doughnut hole takes effect and requires that beneficiaries pay full price for drugs until costs have reached $5,100, after which catastrophic coverage takes effect and about 95% of costs are covered by Medicare.

According to the study, Medicare drug benefit beneficiaries decrease their use of medications by 14% upon reaching the coverage gap.

Findings

The researchers found that about 25% of beneficiaries reached the coverage gap and about 4% reached the $5,100 threshold, making them eligible for catastrophic coverage.

According to the study, those reaching the doughnut hole were typically people with chronic illnesses who filled an average of five prescriptions each month. Along with cutting back on medications, these beneficiaries also stopped using an average of one in five prescriptions during the coverage gap.

However, those with generic drug coverage did not reduce their use of medications after reaching that phase. Generic drugs typically cost about one-fourth as much as brand-name treatments.

The report states that "one can assume not only that the lack of coverage in the doughnut hole had adverse health consequences but also that it could have increased costs for hospital and physician services."

The authors suggest that beneficiaries' contribution to the first phase of the plan could be slightly increased to offset the added expense of generic coverage.

Methodology