According to a study published in JAMA, Medicare beneficiaries who enroll in Part D are not fully informed about the cost-sharing requirements of the plan. John Hsu, M.D., M.B.A., M.S.C.E. (Kaiser Permanente Medical Care Program, Oakland, Calif.) and colleagues also found that more than 33% of enrollees report behaviors such as reducing drug adherence or switching to less expensive drugs in order to cope with costs.
Medicare Part D benefits require complex and high levels of cost sharing that is designed to limit drug costs. This includes a gap in coverage that began at $2,250 in total drug costs in 2006 and ended after beneficiaries spent $3,600 out-of-pocket. The authors note that, “In 2006, 85 percent of stand-alone prescription drug plans and 72 percent of Medicare Advantage Prescription Drug plans included a coverage gap, meaning that beneficiaries were responsible for all of their drug costs during the gap. In addition, 91 percent of stand-alone prescription drug plans and 93 percent of Medicare Advantage Prescription Drug plans in 2006 had tiered cost sharing prior to the coverage gap, under which beneficiaries paid more for higher-tier drugs such as brand-name medications. Failure to understand these complex benefit structures may limit beneficiaries’ abilities to anticipate or manage their medication costs.”
To further probe these ideas, Hsu and colleagues studied beneficiaries and their knowledge of how Part D is structured. The researchers focused on their awareness of the gap in coverage and cost responses after one full-year of enrollment in the program. A random sample of community-dwelling Kaiser Permanente-Northern California Medicare Advantage beneficiaries age 65 or older were interviewed by telephone in 2007. Each of the 1,040 participants was considered to have a gap in coverage if he or she spent more than $2,250 in drug costs. The researchers collected data relevant to drug costs such as decreased adherence to prescribed drug use, behaviors such as switching to lower-cost medications and other means of defraying costs, and financial distress that resulted in the beneficiary going without certain necessities.
Of the beneficiaries interviewed, about 40% were aware that their drug plan included a coverage gap. Individuals who actually reached the gap during 2006 were more likely to know that the gap existed. Costs were responsible for behavioral changes in about 36% of beneficiaries – cost-coping behavior of any kind was reported in 26% of participants, decreasing adherence in 15%, and financial burdens in 7%. Defraying costs by switching to less expensive medications was the most commonly reported cost-coping behavior. Changes in adherence were most frequently expressed by not refilling prescriptions (8%).
The researchers also noted that in subsequent analyses, costs responses were more frequently reported in beneficiaries who had lower household incomes. Those who were more aware of the coverage gap were more likely to report some kind of cost response than beneficiaries who were unaware of the gap, but had fewer reports of borrowing money or going without necessities.
Hsu and colleagues write that, “The low levels of knowledge found in this study reinforce the need for both improved education and tools for Part D beneficiaries. Lack of knowledge or [lack of planning] could limit potential intended cost-sharing effects of encouraging more judicious resource use. Lack of awareness also may limit beneficiaries’ ability to avoid higher drug costs. Increased efforts by Medicare and health plans to educate beneficiaries on the details of their Part D cost-sharing structures and levels are needed.”
In the same issue of the journal, an editorial written by Dana P. Goldman, Ph.D. (RAND Corporation, Santa Monica, Calif. and the National Bureau of Economic Research, Cambridge, Mass.) and Geoffrey F. Joyce, Ph.D. (RAND Corporation) opines on the recent results regarding Medicare Part D:
“The primary objective of the Medicare Modernization Act was to provide seniors with affordable coverage for their prescription medications. This goal has been largely achieved, as more than 90 percent of Medicare beneficiaries now have prescription drug coverage at least as generous as the Standard Part D benefit. The fact that average premiums are substantially lower than initial projections provides some evidence that the market is working. The articles by Hsu et al and by Madden et al document beneficiary confusion and problems with adherence-issues that are not likely to be endemic but still must be monitored. It may be that some features of the Part D benefit, especially the dreaded doughnut hole [the gap in the standard benefit under Part D], are ripe for redesign.”
Medicare Beneficiaries’ Knowledge of Part D Prescription Drug Program Benefits and Responses to Drug Costs
John Hsu; Vicki Fung; Mary Price; Jie Huang; Richard Brand; Rita Hui; Bruce Fireman; Joseph P. Newhouse
JAMA. 2008;299(16):1929-1936.
Written by: Peter M Crosta