Prescription Drug Coverage Caps for Seniors Do Not Result in Savings, Study Finds

Medicare beneficiaries with caps on prescription drug coverage spend 31% less on medications than those without caps but are more likely to skip doses of treatments, visit hospital emergency departments and die, according to a study published on Thursday in the New England Journal of Medicine, the Washington Post reports (Washington Post, 6/1).

For the study, researchers at Kaiser Permanente, the University of California-San Francisco and Harvard University examined the cost of medical care and clinical outcomes for 199,179 Medicare beneficiaries enrolled in a Kaiser Medicare+Choice plan in 2003. Researchers compared a group of 157,275 participants with a $1,000 annual cap on prescription drug coverage with a group of 41,904 participants without a cap (Hechinger, Wall Street Journal, 6/1). All participants had to make copayments of between $15 and $30 for brand-name prescription drugs and copays of $10 for generic medications (Washington Post, 6/1).

The study finds that both groups of participants had about the same total medical costs, in large part because those with caps on prescription drug coverage had a 9% higher rate of ED visits, a 13% higher rate of nonelective hospitalizations and a 22% higher mortality rate (Wall Street Journal, 6/1).

In addition, the study finds that participants who reached their caps on prescription drug coverage often skipped doses of medications and were more likely to have problems with blood pressure, cholesterol and diabetes (Kleffman, Contra Costa Times, 6/1). According to the study, 18.1% of participants with caps on prescription drug coverage skipped doses of hypertension medications, compared with 14.6% of those without caps (Wall Street Journal, 6/1).

The Agency for Healthcare Research and Quality, the National Institute on Aging and the Alfred P. Sloan Foundation funded the study (Colliver, San Francisco Chronicle, 6/1).

John Hsu, a physician at the Kaiser Division of Research and lead author of the study, said, "There was harm associated with the drug benefit cap. Once they lost their coverage, the people with a cap were taking far fewer medications and their blood pressure and cholesterol became worse" (Contra Costa Times, 6/1).

In an editorial that accompanied the study, Kenneth Thorpe, a professor of health policy at Emory University, writes that the results indicate individuals with chronic diseases should not have caps on prescription drug coverage (Wall Street Journal, 6/1).

Mohit Ghose, a spokesperson for America's Health Insurance Plans, said that Kaiser ended caps on prescription drug coverage for Medicare beneficiaries in 2004 and that such caps are not common among health plans (Sevrens Lyons, San Jose Mercury News, 6/1).

The study "gives ammunition to critics of the new Medicare [prescription drug benefit], which includes payment restrictions," the Journal reports (Wall Street Journal, 6/1). Under the Medicare prescription drug benefit, beneficiaries are responsible for 100% of total annual medication costs between $2,250 and $5,100 (San Jose Mercury News, 6/1).

In his editorial, Thorpe writes that the coverage gap in the Medicare drug benefit "may very well be penny-wise and pound-foolish" (Wall Street Journal, 6/1).

However, Jack Cheevers, a spokesperson for CMS in San Francisco, said that millions of Medicare beneficiaries will never reach the coverage gap and that concerned beneficiaries can purchase supplemental coverage (San Jose Mercury News, 6/1).

An abstract of the study is available online.