The Medicare Part D drug benefit, introduced in January 2006 was designed to help address the needs of seniors with high out-of-pocket costs for medications (1
) and to provide continuous access to needed chronic illness medications (3
). A unique feature of Medicare Part D is that under the standard benefit structure, enrollees have a potential coverage “gap”, commonly referred to as a “doughnut hole”, in prescription drug cost coverage. The standard Part D benefit in 2006 began with partial coverage for the first $2,250 of total
drug costs in 2006, followed by a period of no coverage until patients reach cumulative out-of-pocket costs of $3,600 in 2006 (5
). At the end of the gap “catastrophic coverage” begins; patients often pay only 5% of drug costs or a pre-determined co-pay from that time forward (6
). An estimated 18.2 million beneficiaries (89% of Part D enrollees not receiving a low income subsidy) in 2006 were enrolled in a Medicare Part D plan with a full coverage gap (7
Patients with chronic illnesses such as diabetes are at particularly high risk for facing high drug and other out-of-pocket costs given their need for chronic drug therapy, and frequent need for multiple drugs to treat comorbid conditions. Persons with diabetes in particular often require daily medication to control their blood sugar levels, plus often require concurrent chronic treatment for other conditions (8
). The cost of managing chronic illness is high for the government as well, and the diabetes population is of particular interest. While approximately 20% of Medicare beneficiaries have diabetes, the Center for Medicare and Medicaid Services (CMS) has estimated that up to 32% of all Medicare spending could be attributed to patients with diabetes (11
). The costs for drug such as insulin and oral agents to control diabetes account for up to 12% of the health care expenditures attributable to the disease (12
The high levels of clinical need for drug therapy combined with substantial out-of-pocket costs for patients with diabetes may make them more vulnerable to cost-related medication non-adherence (3
). Studies suggest that elderly patients reduce their medication use when faced with limited prescription benefit coverage (1
), and experience adverse health consequences including non-elective hospitalizations and death (14
). Current studies examining the effect of Medicare Part D on adherence and cost are mixed. Some studies suggest Medicare Part D's introduction improved adherence and decreased out-of-pocket costs (16
), while others found evidence that drug costs decreased medication adherence, especially for those entering the coverage gap (1
). Such effects may be more pronounced in patients with comorbidities and worse health status (19
) such as those with diabetes.
One recent study conducted in a Medicare Advantage Prescription Drug (MAPD) plan offered by an integrated delivery system included in this study reported that 8% of beneficiaries overall entered the coverage gap in 2006 (18
), a rate much lower than pre-2006 projections of gap entry rates for the general population (6
). One pre-Part D implementation study of diabetic Medicare beneficiaries estimated that 64% would enter the coverage gap in the first year (20
). However, there is currently no empirical information on how many seniors with diabetes enter and exit the “doughnut hole” of prescription drug coverage in Medicare Part D plans.
This study examines total drug costs, out-of-pocket drug costs, and the rates of entry and exit into the Medicare Part D coverage gap in an important subset of Medicare beneficiaries, those with diabetes, for patients from two large MAPD plans in California.