How the medicare part D drug benefit changed the distribution of out-of-pocket pharmacy spending among older beneficiaries

Abstract

Objective. To examine the impact of the Medicare drug benefit (Part D) on the distribution of out-of-pocket pharmacy spending among older adults. Methods. We used a pre-post-with-comparison-group design to compare four groups of beneficiaries continuously enrolled in a Medicare Advantage plan between 2004 and 2007: three intervention groups with no or limited (quarterly caps of $150 or $350) prior coverage that obtained Part D benefits in 2006 and a comparison group with stable drug coverage from 2004 to 2007. Results. The comparison group's out-of-pocket drug spending was stable throughout 2004-2007, whereas Part D reduced out-of-pocket spending 13.4% among those without prior coverage (95% confidence interval [CI] -17.1% to -9.1%) and 15.9% among those with $150 quarterly caps (95% CI -19.1% to -12.8%) relative to the comparison group. Individuals in the top decile of drug spending paid a greater share of their costs out-of-pocket than others in the top 5 deciles. Discussion. Although Part D reduced out-of-pocket expenditures for older adults, those with the highest drug spending still pay a substantial share of their drug costs out-of-pocket. Thus, the Part D benefit does not achieve a primary purpose of insurance - to offer the greatest financial protection to those at the highest risk. © The Author 2009. Published by Oxford University Press on behalf of The Gerontological Society of America. All rights reserved.