Medicare Beneficiaries Overspend on Rx Drug Coverage, Study Finds
An overwhelming majority of Medicare beneficiaries pay hundreds of dollars more than necessary for prescription drug coverage, primarily because of confusing details about available plans, according to a new Health Affairs study published this week, Kaiser Health News' "Capsules" reports (Rao, "Capsules," Kaiser Health News, 10/11).
For the study, researchers from the University of Pittsburgh Graduate School Of Public Health analyzed 2009 data on more than 412,000 Medicare beneficiaries with an average age of 75 (Preidt, HealthDay/Louisville Courier-Journal, 10/11).
The study found that the beneficiaries spent an average of $368 more than they needed to for prescription drug coverage, and just 5.2% of the beneficiaries selected plans that met their economic needs. According to "Capsules," this occurred despite the availability of video tutorials, online materials and printed information designed to help them select the right plan.
The researchers suggested that the high number of available plans -- 1,736 -- might have played a role in confusing beneficiaries. The amount of overspending increased by $3.20 for each additional plan that was introduced in a region, the study found.
The researchers also noted beneficiaries' tendency to "overprotect themselves by purchasing plans with relatively generous features" could have been a driving factor in spending excessively ("Capsules," Kaiser Health News, 10/11).
Additional Study Findings
The study also found that beneficiaries:
- With common medical conditions like diabetes and chronic heart failure were more likely to choose less-costly plans;
- With mental health disorders, such as Alzheimer's disease, spent an average of $10 less than individuals without such conditions;
- Older than age 85 overspent by $30 more than those between ages 65 and 69; and
- Who are white tended to select more expensive plans than minorities.
Recommendations To Address Problem
Yuting Zhang -- co-author of the study and an associate professor of health economics at the University of Pittsburgh -- offered several strategies that the federal government could adopt to help Medicare beneficiaries choose more economical prescription drug plans, including:
Recommending the three most appropriate plans for each beneficiary based on medication history; or
Assigning beneficiaries to the most appropriate plan based on medication history, with the option to select a different plan (HealthDay/Louisville Courier-Journal, 10/11).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.