Medicare Prescription Drug Program Has Exceeded
Expectations, Says New Study
'Most seniors now have prescription drug coverage
that allows them to buy drugs at a reasonable cost'
Aug. 24, 2009 - Although Medicare Part D the
prescription drug program - generated confusion when it was introduced
in January 2006, the program has worked well for most seniors and is
comparable to other non-Medicare drug plans that cover large groups of
seniors, according to the report published in the August edition of the
American Journal of Managed Care.
The program exceeded expectations during its first
two years, extending pharmacy coverage to most seniors while reducing
their overall spending on drugs, according to the new RAND Corporation
study.
"In the beginning there was a lot of concern about
Medicare Part D, but we found convincing evidence that it has exceeded
expectations and generally has been successful," said Geoffrey Joyce,
the study's lead author and a senior economist at RAND, a nonprofit
research organization.
"Most seniors now have prescription drug coverage
that allows them to buy drugs at a reasonable cost."
Researchers estimate that during its first year in
2006, Medicare Part D resulted in a 16 percent drop in out-of-pocket
spending among seniors for prescription medication and a 7 percent
increase in the number of prescriptions filled. The savings appears to
have been concentrated among the poor and disabled.
"It appears that Medicare Part D has been
particularly successful in lowering costs for the poor and the disabled,
which is an important finding since initially there was concern these
groups would be particularly vulnerable under a privately administered
benefit," Joyce said.
Researchers from RAND Health used administrative
records to examine seniors' participation in the Medicare Part D
program, including how the program has affected seniors' access to
medications, their use of prescription drugs and their financial risk.
They also compared the 10 largest Part D plans in 2006 to seven
non-Medicare drug plans often cited as examples of low-cost or generous
pharmacy benefits.
After two years, about 90 percent of seniors have
drug coverage at least as generous as the standard Part D benefit.
Medicare recipients in most states could choose from more than 50
different Part D plans in 2008, a sign of competition among the private
companies that provide the coverage.
The number of covered drugs in the 10 largest
Medicare Part D plans compared favorably with the coverage provided by
other prescription drug plans that insure seniors, such as those offered
by Kaiser Permanente, the Veterans Administration and the California
Public Employees Retirement System.
Among the 300 prescription drugs most often used by
seniors, about half were covered under the lowest co-payment tiers
provided by the 10 largest Medicare Part D plans, according to the
study. The number of drugs not covered varied from four to 41 among the
largest Part D plans. In contrast, Kaiser Permanente and the Veterans
Administration excluded 75 and 84 medications, respectively.
Problems Do Exist
Although the program has exceeded initial
expectations, researchers say problems remain with Medicare Part D.
A substantial number of predominantly low-income
seniors still need to be better educated that enrolling in the program
is in their interest and given instruction about how to evaluate the
many plans offered to choose the one that best meets their prescription
drug needs.
In addition, the annual spending caps included in
the plans leave too many seniors without pharmacy coverage for a portion
of each year, according to researchers. Recent work suggests that 3
million seniors reached the so called "donut hole" or gap in Part D
coverage during 2007, with about 20 percent of seniors stopping their
medications after their coverage lapsed for the year.
Funding for the study was provided by the
California HealthCare Foundation, the National Institute on Aging
through its support of the RAND Roybal Center for Health Policy
Simulation and the Bing Center for Health Economics.
Other authors of the study are Dana Goldman and
William B. Vogt of RAND, and Eric Sun and Anupam B. Jena of RAND and the
University of Chicago.
RAND Health Describes Inself
RAND Health, a division of the RAND Corporation,
is the nation's largest independent health policy research program, with
a broad research portfolio that focuses on quality, costs and health
services delivery, among other topics. RAND Health is the creator of
COMPARE (Comprehensive Assessment of Reform Efforts), a one-of-a-kind
online resource that provides objective analysis about national health
care reform proposals. Visit
www.randcompare.org to learn more.
The RAND Corporation is a nonprofit research
organization providing objective analysis and effective solutions that
address the challenges facing the public and private sectors around the
world. To sign up for RAND e-mail alerts:
http://www.rand.org/publications/email.html
Keep up with the latest news for senior citizens, baby
boomers
Aug. 24, 2009 - Although Medicare Part D the
prescription drug program - generated confusion when it was introduced
in January 2006, the program has worked well for most seniors and is
comparable to other non-Medicare drug plans that cover large groups of
seniors, according to the report published in the August edition of the
American Journal of Managed Care. 
President says agreement has been worked out with
pharmaceutical industry for 50% discount
