FOR RELEASE UNTIL
Tuesday, April 5, 2005, 12:01 p.m. ET
Drug Benefit Will Help Seniors,
But Chronically Ill Will Pay More Than Average Enrollee,
Health Affairs Article Says
Series Of Articles
Raises Questions About Benefit Design
As Feds Prepare To Cover Drugs For First Time
BETHESDA, MD—The implementation of Medicare’s prescription drug benefit next year is likely to aid many seniors, but the design of the benefit will not completely eliminate cost concerns and is likely to raise questions of equity, according to articles posted today on the Health Affairs Web site.
An analysis of Medicare data shows that seniors with chronic conditions are likely to pay much more from their own pockets for prescription drugs than the average beneficiary under Medicare’s new prescription drug benefit. A separate survey of beneficiaries shows that seniors often fail to take their drugs as directed when they become too costly, while a third article shows that seniors who enrolled in the Medicare drug discount card program this year still spent more than $1,300 annually on medications.
Using data from the Medicare Current Beneficiary Survey, Bruce Stuart, a professor at the University of Maryland School of Pharmacy in Baltimore, compared simulated drug spending under the Medicare Part D benefit for seniors with diabetes, chronic lung disease, and mental illness.
Given the premium, deductible, coinsurance, and uncovered expense known as the “doughnut hole,” Stuart projects that the average beneficiary who signs up for the standard Part D benefit will spend $722 out of pocket in 2006. By contrast, beneficiaries with one of the studied chronic conditions will pay much more out of pocket: an average of $1,581 for those with diabetes, $1,435 for those with chronic lung disease, and $1,844 for those with mental illness.
These high average out-of-pocket payments reflect the amount of time chronically ill beneficiaries will spend in the coverage gaps in the standard Part D benefit: an average of 4.8 months for diabetics, 4.4 months for those with lung disease, and 5.3 months for mentally ill beneficiaries.
“Beneficiaries with average drug spending will have reasonably good coverage under Part D,” Stuart says. “But those with the selected chronic conditions will face a very different scenario. They will spend considerably more on medications than the average beneficiary and thus will face longer gaps in coverage, given the design of Part D.”
Stuart’s work was supported with funding from the Robert Wood Johnson Foundation.
When seniors are faced with costly drug regimens, they often skip doses, take smaller doses than prescribed, or fail to fill prescriptions at all, according to the second article. Dana Gelb Safran, director of the Health Institute at Tufts-New England Medical Center, and colleagues write that 26.3 percent of seniors in a 2003 survey said that they hadn’t fully adhered to prescriptions because of costs—skipping or splitting doses, failing to fill prescriptions, or spending less on basic needs to afford medications.
Among seniors with no drug coverage, 36.8 percent did not adhere to drug regimens, while 35.2 percent of low-income seniors and 34.9 percent of those with three or more chronic conditions failed to adhere to their drug regimens, Safran and colleagues say.
“The findings leave no doubt about the difference that prescription coverage makes,” Safran says. “And with one-quarter of seniors now lacking such coverage, Part D clearly has the potential to bring both financial relief and improved health care quality to this group.”
But she adds: “Not all coverage is created equal. And differences in coverage generosity have substantial consequences in terms of seniors’ ability to afford their medicines. These findings remind us that the potential for the new Medicare drug benefit to mitigate high drug spending — and enable seniors to adhere to their prescription regimens — will depend on the generosity of Part D coverage in 2006 and over the long term.”
The work of Safran and colleagues was supported by the Commonwealth Fund and the Henry J. Kaiser Family Foundation.
A third article analyzes the use of a discount card program for seniors in the year before the Medicare prescription drug discount card program premiered in 2004. Enrollment and claims data show that seniors who actively enrolled saved 20 percent overall on their prescription drug purchases, but still spent more than $1,300 a year on medication, according to the analysis by Cindy Parks Thomas, senior scientist at the Schneider Institute for Health Policy at Brandeis University, and her colleagues.
“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,” Thomas says. “This suggests that those who purchase and use a drug discount card are high users of prescription drugs and that they use that card for most of their prescription purchases.
“Judging by average
patterns of use (and consistent with a survey of Medicare beneficiaries with
discount cards in 2002), most do not have other prescription drug coverage,”
The analysis by Thomas and colleagues, supported in part by UnitedHealth Group, also shows that three-quarters of enrollees who actively purchased a card used it at least once during the year, compared with only 37 percent of those who received cards automatically as part of an insurance benefit.
“To the extent that low card use could be attributable to lack of understanding of the value of the card or how to use it, seniors and others new to a coverage program might require considerable outreach and education to be able to take advantage of it,” Thomas says. “This is important to consider in implementing Medicare Part D, in light of penalties for delayed enrollment.”
An interview with Barrett Toan, chief executive officer of the pharmacy benefit manager Express Scripts, accompanies the papers.
You can read Stuart’s article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.167
You can read Safran’s article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.152
You can read Thomas’ article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.180
You can read the Toan interview
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