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Medicare Drug Program News
One of Four Seniors Who Used Medicare Drug Program
in 2007 Fell into ‘Donut Hole’
Many who fell in just stopped taking their
prescription drugs
 Sept. 21, 2008 – With senior citizens beginning to
consider their options in the Medicare Prescription Drug Program for
2009, the Kaiser Family Foundation has released a new study that shows
many seniors just tend to stop taking their prescription drugs, when
they hit the gap, or “donut hole,” where there is no coverage. The study
of data from 2007 also shows one in four (26 percent) Part D enrollees
who filled any prescriptions in 2007 did reach the coverage gap.
This includes 22 percent who remained in the gap
for the remainder of the year, and 4 percent who ultimately received
catastrophic coverage.
Applying this estimate to the entire population of
Part D enrollees, the analysis suggests that about 3.4 million
beneficiaries (14 percent of all Part D enrollees) reached the coverage
gap and faced the full cost of their prescriptions in 2007.
Beneficiaries taking drugs for serious chronic
conditions had a substantially higher risk of a gap in coverage under
their Medicare drug plan. For example, 64 percent of enrollees taking
medications for Alzheimer’s disease reached the coverage gap in 2007, as
did 51 percent of those taking oral anti-diabetic medications and 45
percent of patients on antidepressants.
The analysis excludes beneficiaries who receive
low-income subsidies because they do not face a gap in coverage under
their Medicare drug plan.
Conducted by researchers at Georgetown University,
NORC at the University of Chicago and Kaiser, the study found evidence
of patients changing their use of prescription drugs when they are
required to pay the full cost of medications in the coverage gap.
Across eight classes of drugs examined – used to
treat a variety of relatively common chronic conditions – 15 percent of
Part D enrollees who reached the gap stopped their drug therapy for that
condition, 5 percent switched to another medication in the class, and 1
percent reduced the number of drugs they were taking in the class.
”The Medicare drug benefit has produced tangible
relief for millions of people, despite the unusual coverage gap that was
created to make the benefit fit within budget constraints,” Kaiser CEO
and President Drew Altman said.
“But if a new president and Congress consider
changes to the drug benefit, it will be important to keep in mind that
the coverage gap has consequences for some patients with serious health
conditions.”
For people with a chronic condition such as
diabetes, stopping a medication even temporarily can have serious and
immediate health consequences.
The study found that 10 percent of Part D enrollees
taking oral anti-diabetic drugs who reached the coverage gap stopped
taking their medications. In other cases, the potential consequences
may be realized over a longer term. For example, among Part D enrollees
taking a drug for osteoporosis who reached the gap, 18 percent stopped
taking medications.
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The "Donut Hole"
The standard Part D benefit in 2008 has a $275
deductible and 25 percent coinsurance up to an
initial coverage limit of $2,510 in total drug
costs, followed by a coverage gap -- the so-called
“donut hole” -- where enrollees pay all of their
next $3,216 in drug costs. After reaching that
limit, beneficiaries pay 5 percent of any additional
drug costs. For 2007, these amounts were somewhat
lower. |
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In other instances, the health implications are
less clear. For example, 20 percent of those taking Proton Pump
Inhibitors who ended up in the gap discontinued their medications.
Because there is some concern that such drugs (for ulcers and acid
reflux) are overused for more routine gastrointestinal conditions,
termination of therapy might not pose serious health risks in all cases.
Beneficiaries who reached the coverage gap faced
substantial increases in out-of-pocket spending.
For example, among Part D enrollees who reached the
coverage gap, but did not receive catastrophic coverage, average monthly
out-of-pocket costs nearly doubled from $104 prior to the coverage gap,
to $196 in the “donut hole.”
The vast majority (84 percent) of the Part D
enrollees who reached the coverage gap did not have sufficient
additional drug spending during the year to receive catastrophic
coverage, at which point their Part D plan would pay 95 percent of drug
costs.
The study also found that people who reached the
gap paid the full cost of their medications, without any help from their
Part D plan, for an average of just over 4 months and received
catastrophic coverage for less than one month.
This study analyzes retail pharmacy claims data,
based on 4.5 million Medicare beneficiaries in Part D plans in 2007, the
first year that most people would be enrolled in a Part D plan for a
full calendar year. The analysis is based on 2007 data from IMS Health’s
Longitudinal Prescription Drug Database, which includes prescription
drug information that represents half of all retail prescriptions filled
in the U.S.
The report,
The Medicare Part D Coverage Gap: Costs and Consequences in 2007, is
available online. The research team includes: Jack Hoadley of
Georgetown University, Elizabeth Hargrave of NORC at the University of
Chicago, and Juliette Cubanski and Tricia Neuman at the Kaiser Family
Foundation.
The Kaiser Family Foundation is a non-profit
private operating foundation, based in Menlo Park, Calif., dedicated to
producing and communicating the best possible information, research and
analysis on health issues.
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