Health Affairs Examines Potential Effects of Medicare Prescription Drug Benefit
The journal Health Affairs on Tuesday published on its Web site three articles that analyze the Medicare prescription drug benefit, which is scheduled to take effect in 2006. Summaries of the analyses appear below.
Medicare beneficiaries with chronic health conditions will see fewer savings from the new prescription drug benefit than beneficiaries without chronic conditions, according to an analysis led by Bruce Stuart, executive director of the Peter Lamy Center on Drug Therapy and Aging at the University of Maryland School of Pharmacy, the Washington Post reports.
For the study, Stuart examined data on drug spending from a nationally representative sample of 3,000 seniors from 1998 through 2000. He found that out-of-pocket savings "will be unequally distributed" among participants because of the drug benefit program's design. According to Stuart, beneficiaries who rely on maintenance drugs for chronic conditions such as Alzheimer's disease or arthritis are likely to be most significantly affected by the so-called doughnut hole in the coverage, under which beneficiaries will be responsible for 100% of drug costs between $2,250 and $5,100 in total costs in the program's first year.
The analysis found that the average Medicare beneficiary will spend $722 out of pocket on prescription drugs annually, or 55% less than what would be spent without drug coverage. By contrast, Medicare beneficiaries with diabetes will spend $1,500 out of pocket -- 32% less than without the benefit -- and beneficiaries with mental illnesses will spend more than $1,800 out of pocket, a 16% savings. Because the drug benefit's cycle is renewed each year -- with escalating premiums, deductibles and caps -- Stuart said beneficiaries with moderate to high drug costs "will cycle in and out of coverage persistently from year to year."
In response, CMS Administrator Mark McClellan said, "Beneficiaries with chronic illnesses are going to save more money as a result of this drug coverage" (Connolly, Washington Post, 4/19). The analysis is available online.
About 40% of seniors do not follow prescription drug regimens ordered by their doctor because of cost, negative side effects or reluctance to believe that they need the medications, according to an analysis published on the Health Affairs Web site by Dana Gelb Safran of the Health Institute at Tufts-New England Medical Center, the AP/Las Vegas Sun reports.
The Kaiser Family Foundation and the Commonwealth Fund also sponsored the survey. Researchers surveyed 36,901 noninstitutionalized Medicare beneficiaries by mail between July 15 and Oct. 7, 2003, and about 18,000 responded. Of those who do not adhere to their prescribed regimen, the survey found that about 25% cited cost as a factor (Freking, AP/Las Vegas Sun, 4/18). More than 25% of seniors indicated that they do not have prescription drug coverage (Strahinich, Boston Herald, 4/19).
Of those without drug coverage, 36.8% do not adhere to regimens because of cost. Cost also was cited as reason for nonadherence by 35.2% of low-income seniors and 34.9% of seniors with three or more chronic conditions, the survey found (Health Affairs release, 4/19).
About 25% of those who do not adhere to prescribed regimens cited negative side effects or a perception that the drug was not working as a reason. About 15% of those who do not adhere said they believed they already took too many medications (Boston Herald, 4/19). Of seniors who reported taking prescription drugs within the past year, 46% said they took more than five prescriptions.
The survey also found that 5% of seniors said they had purchased lower-cost prescription drugs from Canada or Mexico. Among seniors with no prescription drug coverage, that rate was 11% (AP/Las Vegas Sun, 4/19).
Safran said that the prescription drug benefit should help lower nonadherence rates related to cost, particularly among seniors who have no drug coverage. She added that reducing nonadherence is contingent on making those seniors who qualify aware of the benefit (Boston Herald, 4/19). The analysis is available online.
Seniors who actively participated in a drug discount card program in the year before the Medicare prescription drug discount card took effect in 2004 were high users of prescription drugs and used the discount card for most of their prescription purchases, according to an analysis by Cindy Parks Thomas, senior scientist at the Schneider Institute for Health Policy at Brandeis University.
For the study, which was supported in part by UnitedHealth Group, Thomas and colleagues examined enrollment and claims data to study seniors' use of the discount drug card. Researchers found that seniors who actively enrolled in a discount program saved 20% overall on prescription drug purchases but still spent more than $1,300 annually on prescription drugs.
Thomas wrote, "The number of prescriptions purchased by continuously enrolled card purchasers appears to be similar to that of the average of insured people in the age groups analyzed and somewhat higher than average for seniors who are uninsured for prescription drugs."
The study found that based on the average patterns of use, most beneficiaries using the cards do not have other prescription drug coverage. The analysis also found that 75% of enrollees who actively acquired a card used it at least once during the year, compared with 37% of those who received cards automatically as part of an insurance benefit.
Thomas attributed low participation in part to a lack of understanding about the cards or how to use them and suggested that officials employ outreach and education campaigns for seniors and others new to a coverage program. The analysis is available online.
An interview with Barrett Toan, CEO of the pharmacy benefit manager Express Scripts, also was published Tuesday on the Health Affairs Web site (Health Affairs release, 4/19). The interview is available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.