Enrollees in the large Medicare Advantage Part D drug plan have a limited knowledge of the plan’s cost-sharing requirements, and more than one-third report cost-coping behaviors such as reducing drug adherence or switching to a cheaper drug, according to a study in the April 23/30 issue of JAMA.1
In comparison with commercial insurance, Part D benefits use complex and high levels of cost sharing to help limit drug costs, including a coverage gap that in 2006 started at $2,250 in total drug costs and ended after $3,600 of beneficiary out-of-pocket spending. “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,” the authors write.
John Hsu, M.D., M.B.A., M.S.C.E., of Kaiser Permanente Medical Care Program, Oakland, Calif., and colleagues investigated beneficiaries’ knowledge of their Part D benefit structures, including their awareness of the coverage gap, after their first full year in the program, and cost responses. Telephone interviews were conducted in 2007 in a random sample of community-dwelling Kaiser Permanente-Northern California Medicare Advantage beneficiaries age 65 years or older, with a gap in coverage if they exceeded $2,250 in drug costs (n = 1,040; 74.9 percent response rate). A range of self-reported responses to drug costs was examined, including decreased adherence to prescribed drug use, use of other cost-coping behaviors (such as switching to lower-cost medications), and reports of financial burden (such as going without necessities).
An estimated 40 percent of beneficiaries knew that their drug plan included a coverage gap. Awareness of the gap increased with 2006 drug costs. Approximately 36 percent of beneficiaries reported changing their behavior because of costs; 26 percent reported any cost-coping behavior; 15 percent reported decreasing adherence; and 7 percent reported experiencing financial burdens. The most frequently reported cost-coping behavior was switching to a cheaper drug (15 percent). Among adherence changes, the most frequently reported behavior was not refilling a prescription (8 percent).
In further analyses, beneficiaries with lower household income more frequently reported cost responses. Compared with beneficiaries who were unaware of having a coverage gap, those who were aware more frequently reported any cost response, but had fewer reports of borrowing money or going without necessities.
“… 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,” the authors write.
In an accompanying editorial, Dana P. Goldman, Ph.D., of the RAND Corporation, Santa Monica, Calif., and the National Bureau of Economic Research, Cambridge, Mass., and Geoffrey F. Joyce, Ph.D., of the RAND Corporation, comment on the studies in this week’s JAMA 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.”
1. JAMA. 2008;299:1929-1936.
2. JAMA. 2008;299:1954-1955.