Drug Benefit Changes Under Medicare Advantage Part D: Heterogeneous Effects on Pharmaceutical Use and Expenditures

  • Susan L. Ettner
  • W. Neil Steers
  • Norman Turk
  • Elaine S. Quiter
  • Carol M. Mangione
Original Research

Abstract

Background

Although Medicare Part D improved drug benefits for many beneficiaries, its impact on the coverage of Medicare Advantage Part D (MAPD) enrollees depended on their pre-existing benefits and whether they had gap coverage under Part D.

Objective

To examine changes in prescription drug utilization and expenditures associated with drug benefit changes resulting from the implementation of Part D.

Patients

We studied 248,773 continuously enrolled MAPD patients in eight states. Patients whose insurance product or Census block could not be identified or who had atypical benefits, low-income subsidies or Medicaid coverage were excluded.

Main Measures

The main outcomes were changes in prescription drug days supply and expenditures from 2005 to 2006 and 2005 to 2007.

Design

We linked Census data with 2005–7 MAPD claims, encounter, enrollment, and benefits data and estimated associations of the outcomes with changes in drug benefits, controlling for 2005 comorbidities, demographics, and Census population characteristics.

Key Results

MAPD enrollees whose drug benefits became potentially less generous after Part D had the smallest increases in drug utilization and expenditures (e.g., drug expenditures increased by $130 between 2005 and 2006), while those who potentially gained the most from Part D experienced the largest increases ($302). The differences in benefit design changes had a stronger association with drug utilization and outcomes among patients at high risk of gap entry than among the entire sample.

Conclusions

Although Medicare Part D unambiguously improved drug coverage for many elderly, it led to heterogeneous changes in drug benefits among MAPD enrollees, who already had generic and sometimes branded drug benefits. After 2006, benefits were worse for individuals who had branded drug coverage in 2005 but now had a coverage gap, but benefits may have improved for individuals who acquired branded drug coverage. Commensurate with these differential changes in benefits following Part D, changes in drug utilization and expenditures varied substantially as well.

KEY WORDS

medicare part D benefit design drug and medical expenditures 

Supplementary material

11606_2011_1766_MOESM1_ESM.doc (34 kb)
eTable 1Sample Size Derivation (DOC 34 kb)
11606_2011_1766_MOESM2_ESM.doc (34 kb)
eTable 2Summary of Changes to MAPD Drug Benefits Following the Implementation of the Medicare Part D Program (DOC 33 kb)
11606_2011_1766_MOESM3_ESM.doc (34 kb)
eTable 3Adjusted Impact of Changes in Prescription Drug Benefits on Changes in Branded Drug Days Supply of Pills (DOC 34 kb)
11606_2011_1766_MOESM4_ESM.doc (34 kb)
eTable 4Adjusted Impact of Changes in Prescription Drug Benefits on Changes in Branded Drug Expenditures (DOC 34 kb)
11606_2011_1766_MOESM5_ESM.doc (34 kb)
eTable 5Adjusted Impact of Changes in Prescription Drug Benefits on Changes in Generic Drug Days Supply of Pills (DOC 34 kb)
11606_2011_1766_MOESM6_ESM.doc (34 kb)
eTable 6Adjusted Impact of Changes in Prescription Drug Benefits on Changes in Generic Drug Expenditures (DOC 34 kb)

References

  1. 1.
    Federal Register. Medicare Part D Final Rule, Medicare drug benefit effective CY 2006 (Title 1). Jan 28, 2005. 70: 4193–4585. Available at: http://edocket.access.gpo.gov/2005/pdf/05-1321.pdf. Accessed June 7, 2011.
  2. 2.
    Frakt AB, Pizer SD. A first look at the new Medicare prescription drug plans. Health Aff (Millwood). 2006;25(4):W252–261.CrossRefGoogle Scholar
  3. 3.
    Hoadley J, Hargrave E, Merrell K, Cubanski J, Neuman T. Benefit design and formularies of Medicare Drug Plans: a comparison of 2006 and 2007 offerings. Menlo Park, CA: Henry J. Kaiser Family Foundation. Nov. 2006. Available at: http://www.kff.org/medicare/upload/7589.pdf. Accessed: June 7, 2011.
  4. 4.
    Summer L, Nemore P, Finberg J. Improving the Medicare Part D Program for the most vulnerable beneficiaries. May 2007. Available at: http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=484282. Accessed: June 7, 2011.
  5. 5.
    Schneeweiss S, Patrick AR, Pedan A, et al. The effect of Medicare Part D coverage on drug use and cost sharing among seniors without prior drug benefits. Health Aff (Millwood). 2009;28(2):w305–316.CrossRefGoogle Scholar
  6. 6.
    IMS. IMS Special Report, Medicare Part D: The first year, Plymouth Meeting. PA: IMS Health, Inc; 2008.Google Scholar
  7. 7.
    Ketcham JD, Simon KI. Medicare Part D's effects on elderly patients' drug costs and utilization. Am J Manag Care. 2008;14(11 Suppl):SP14–22.PubMedGoogle Scholar
  8. 8.
    Yin W, Basu A, Zhang JX, Rabbani A, Meltzer DO, Alexander GC. The effect of the Medicare Part D prescription benefit on drug utilization and expenditures. Ann Intern Med. 2008;148(3):169–177.PubMedGoogle Scholar
  9. 9.
    Lichtenberg FR, Sun SX. The impact of Medicare Part D on prescription drug use by the elderly. Health Aff (Millwood). 2007;26(6):1735–1744.CrossRefGoogle Scholar
  10. 10.
    Zhang Y, Donohue JM, Lave JR, O'Donnell G, Newhouse JP. The effect of Medicare Part D on drug and medical spending. N Engl J Med. 2009;361(1):52–61.PubMedCrossRefGoogle Scholar
  11. 11.
    Zhang Y, Lave JR, Newhouse JP, Donohue JM. How the Medicare Part D Drug Benefit Changed the Distribution of Out-of-Pocket Pharmacy Spending Among Older Beneficiaries. J Gerontol B Psychol Sci Soc Sci. Dec 14 2009.Google Scholar
  12. 12.
    Zhang Y, Lave JR, Donohue JM, Fischer MA, Chernew ME, Newhouse JP. The impact of Medicare Part D on medication adherence among older adults enrolled in Medicare-Advantage products. Med Care. 2010;48(5):409–417.PubMedCrossRefGoogle Scholar
  13. 13.
    Doshi JA, Polsky D. Drug benefit generosity and essential medication use among Medicare-eligible retirees. Am J Manag Care. 2007;13(7):425–431.PubMedGoogle Scholar
  14. 14.
    Pauly MV. Medicare drug coverage and moral hazard. Health Aff (Millwood). 2004;23(1):113–122.CrossRefGoogle Scholar
  15. 15.
    Neuman P, Cubanski J. Medicare Part D update–lessons learned and unfinished business. N Engl J Med. 2009;361(4):406–414.PubMedCrossRefGoogle Scholar
  16. 16.
    Ettner SL, Steers N, Duru OK, et al. Entering and exiting the Medicare part D coverage gap: role of comorbidities and demographics. J Gen Intern Med. 2010;25(6):568–574.PubMedCrossRefGoogle Scholar
  17. 17.
    HCUP. Healthcare Cost and Utilization Project. Clinical Classifications Software (CCS) for ICD-9-CM.: Agency for Healthcare Research and Quality. 2008. Available at: http://hcup-us.ahrq.gov/toolssoftware/ccs/ccs.jsp#download. Accessed: June 7, 2011.
  18. 18.
    Zhang JX, Yin W, Sun SX, Alexander GC. The impact of the Medicare Part D prescription benefit on generic drug use. J Gen Intern Med. 2008;23(10):1673–1678.PubMedCrossRefGoogle Scholar
  19. 19.
    Schneider EC, Zaslavsky AM, Epstein AM. Quality of care in for-profit and not-for-profit health plans enrolling Medicare beneficiaries. Am J Med. 2005;118(12):1392–1400.PubMedCrossRefGoogle Scholar

Copyright information

© Society of General Internal Medicine 2011

Authors and Affiliations

  • Susan L. Ettner
    • 1
    • 2
  • W. Neil Steers
    • 1
  • Norman Turk
    • 1
  • Elaine S. Quiter
    • 3
  • Carol M. Mangione
    • 1
    • 2
  1. 1.Division of General Internal Medicine and Health Services Research, Department of MedicineDavid Geffen School of Medicine at UCLALos AngelesUSA
  2. 2.Department of Health ServicesUCLA School of Public HealthLos AngelesUSA
  3. 3.Department of Community Health SciencesUCLA School of Public HealthLos AngelesUSA

Personalised recommendations