Senior Citizens Who Fall into Medicare Drug
Programs Donut Hole Decrease Use of Meds
Raises concerns about health, increased costs of
healthcare; authors suggest policy change to mandate the coverage of
generic drugs through modest increase in co-pays
Feb. 3, 2009 Senior citizens enrolled in Medicare
Part D who reached the gap in prescription drug coverage known as the
"donut hole" were much less likely to continue their prescription drugs
than those with an employer-based plan, according to a University of
Pittsburgh Graduate School of Public Health study.
The findings, published in the Feb. 3 online issue
of Health Affairs, raise concerns about health consequences and
increased costs from hospitalizations and physician visits that may
arise from lack of coverage. To protect seniors, the authors suggest a
change in policy that would mandate the coverage of generic drugs in the
donut hole through a modest increase in initial prescription co-pays.
Medicare Part D, which offers prescription drug
coverage for Medicare beneficiaries, took effect in January 2006. A
controversial aspect of its design is the donut hole, a gap in coverage
of prescription drugs that in 2006 occurred when annual individual drug
expenditures reached $2,250.
The purpose of the annual spending cap is to keep
the cost of the program within federally approved limits. Since its
inception, "there have been few studies to tell us what happens to
beneficiaries once they enter the donut hole," said the study's lead
author, Yuting Zhang, Ph.D., assistant professor of health economics at
the University of Pittsburgh Graduate School of Public Health.
Dr. Zhang and colleagues compared two groups of
senior citizens with Medicare drug coverage provided by a large
Pennsylvania insurer in 2006. One group was covered through more
generous employer-sponsored plans with full coverage in the donut hole
and the other was covered through Medicare Advantage prescription drug
plans (MA-PD) with either no donut hole drug coverage or generic
coverage only.
They found that one in four (25 percent) of
Pennsylvanians enrolled in an MA-PD reached the donut hole, but only one
in 20 (5 percent) of that subset of individuals went on to reach the
catastrophic phase of coverage when annual drug spending reached
$5,100 and Part D coverage of drugs resumed.
In addition, Medicare beneficiaries who lacked
coverage in the donut hole reduced their monthly prescriptions by 14
percent per month once they entered the donut hole. Those with generic
coverage in the donut hole decreased their monthly prescriptions by only
3 percent, and those who were enrolled in employer-based plans had no
changes in monthly prescriptions when they reached the donut hole
spending level.
The study also found that Medicare beneficiaries
with diabetes were more likely to reach the donut hole than those with
hypertension, and they reached it sooner. Those with more than one
chronic illness also were much more likely to reach the donut hole 34
percent with both hypertension and diabetes reached it, and 61 percent
of those with hypertension, hyperlipidemia, congestive heart failure and
diabetes did so.
"Our findings raise concerns about whether people
with chronic illnesses who lack donut hole coverage are able to
effectively manage their conditions," said Dr. Zhang. "Without needed
prescriptions, we could potentially see an increase in hospital and
physician costs."
To fill the gap, Dr. Zhang and colleagues suggest
mandating the coverage of generic drugs in the donut hole and
off-setting government costs by allowing plans to assess larger co-pays
on prescription drugs prior to entering the donut hole. Increasing the
current initial 25 percent co-pay by 6 to 9 percentage points, they
suggest, would finance generic drug coverage in the donut hole with up
to $10 co-pay for each monthly prescription, thus providing needed
protection to seniors who would otherwise face a gap in coverage.
Background Information
Co-authors of the study include senior author
Judith Lave, Ph.D., and Julie Donohue, Ph.D., with the University of
Pittsburgh Graduate School of Public Health; and Joseph P. Newhouse,
Ph.D., with Harvard University
The study was funded in part by a grant to Dr.
Newhouse from the Alfred P. Sloan Foundation and a grant to Dr. Donohue
from the National Institutes of Health.
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http://www.publichealth.pitt.edu.
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Feb. 3, 2009 Senior citizens enrolled in Medicare
Part D who reached the gap in prescription drug coverage known as the
"donut hole" were much less likely to continue their prescription drugs
than those with an employer-based plan, according to a University of
Pittsburgh Graduate School of Public Health study. 