US Medicare Part D effects analysed

The Journal of the American Medical Association has published two studies into different effects of the Medicare Part D prescription drug benefit for seniors which went into operation in May 2006 (Marketletters passim). One of them, carried out by a team from the Kaiser Permanente Medical Care Program, California, found that beneficiaries of the prescription drug scheme are not fully informed about the cost-sharing requirements of Part D. The other report, by contrast, identified an improvement in cost-related medication non-adherence (CRN), which would imply that the Kaiser findings are not critical. The latter study was led by Jeanne Madden, of the Harvard Medical School and Harvard Pilgrim Health Care, Massachusetts.

The Kaiser research, led by John Hsu, generated a headline finding that 33% of enrollees reported either reducing their drug consumption or switching from branded to generic products. It was based on telephone surveys of a random sample of 1,040 Kaiser Permanente-Northern California Medicare Advantage subscribers. The Harvard study examined changes in treatment compliance by using data gathered from 24,234 people who took part in the Medicare Current Beneficiary Surveys from 2004 to 2006. It found that the decrease in CRN had accelerated with the introduction of Part D, but not in a uniform manner.

The coverage gap in the seniors drug benefit, the notorious "Donut hole," meant that once a beneficiary reached $2,250 in annual drug costs, he or she had to pay in full for the next $1,350 before the Part D's catastrophic coverage kicked in. According to the Kaiser report, in 2006, 85% of stand-alone and 72% of Medicare Advantage prescription drug plans included a coverage gap. In addition to this, over 90% of both types of insurance included cost sharing arrangements before reaching the Donut hole.