From Kaiser Family Foundation: NEW STUDY EXAMINES IMPACT OF ‘DOUGHNUT HOLE’ ON PEOPLE ENROLLED IN MEDICARE DRUG PLANS IN 2007

Approximately 3.4 Million Part D Enrollees, Including Many with Serious Medical Conditions, Reached the Coverage Gap in 2007, Leading Some to Stop Treatment

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Washington, D.C. - A new analysis from the Kaiser Family Foundation quantifies, for the first time, the number of Medicare Part D plan enrollees in 2007 who reached a gap in their prescription drug coverage known as the “doughnut hole,” as well as the changes in beneficiaries' use of medications and out-of-pocket spending after they reached that gap. The analysis excludes beneficiaries who receive low-income subsidies because they do not face a gap in coverage under their Medicare drug plan.

The study of Part D prescription drug utilization finds that one in four (26 percent) Part D enrollees who filled any prescriptions in 2007 reached 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. As noted above, these percentages are among Part D plan enrollees who did not receive low-income subsidies.

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.”

The Medicare Part D Coverage Gap: Costs and Consequences in 2007
http://www.kff.org/medicare/7811.cfm

This study quantifies, for the first time, the number of Medicare Part D plan enrollees in 2007 who reached a gap in their prescription drug coverage known as the "doughnut hole," as well as the changes in beneficiaries' use of medications and out-of-pocket spending after they reached that gap. The analysis excludes beneficiaries who receive low-income subsidies because they do not face a gap in coverage under their Medicare drug plan.

This study of Part D prescription drug utilization finds that one in four (26%) Part D enrollees who filled any prescriptions in 2007 reached the coverage gap. This also includes 22 percent who remained in the gap for the remainder of the year, and four 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% of all Part D enrollees) reached the coverage gap and faced the full cost of their prescriptions in 2007.

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, five percent switched to another medication in the class, and one percent reduced the number of drugs they were taking in the class.

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.

Report (.pdf)

News Release

Information provided by the Medicare Policy Project
Publication Number: 7811
Publish Date: 2008-08-21