Our study found that after the transition year of 2006, the impact of Part D appeared larger and more consistent across the Medicare population. Of note, sick and poor beneficiaries experienced significant improvements in prescription drug use in 2007. Like the earlier studies, we found that the first year of Part D was associated with a modest but significant 6% increase in average prescription drug use over predicted levels (32.8 vs. 31.0) across the overall Medicare community-dwelling population.(2
) However, we found a much larger impact in 2007, namely a significant 14% increase in average prescription drug use over predicted levels (35.0 vs. 31.6). Furthermore, the significant 23% decrease in average OOP drug costs over the predicted levels ($618 vs. $475) that we detected in 2006 was sustained in 2007 ($624 vs. $476). The stability of the lower OOP drug costs in the second year of operation is a new finding with important implications. If we take into account the large increases in prescription use in 2007, this means Medicare beneficiaries actually paid, on average, closer to 35% less in OOP drug costs per fill in 2007 than predicted levels based on historical trends. These are the largest estimates of the impact of Part D on OOP drug costs to date.
Furthermore, we found for the first time that nearly all of the increases in average prescription drug use detected in 2006 occurred among Medicare beneficiaries in excellent to good health. Our analysis found no significant increases in average prescription drug use in 2006 among most beneficiaries with fair to poor health including the non-elderly disabled, Black non-Hispanics, metropolitan residents, and poor beneficiaries within 200% FPL but no Medicaid assistance. However, we did find a lagged Part D impact for these same groups in 2007; Medicare beneficiaries in fair to poor health experienced significant and sometimes large increases of up to 11 additional prescription fills over predicted levels in 2007. In comparison, decreases in OOP drug costs occurred almost uniformly across health status groups in both 2006 and 2007.
Our study offers a unique combination of nationally-representative data spanning 6 years before and 2 years after the implementation of Part D and a rigorous longitudinal study design. Our use of time-series regressions and standardization weights allowed us to provide robust estimates of Part D impacts, especially after the transitional initial year. This study also offers one of the first assessments of whether the program had consistent impacts across vulnerable poor and chronically ill populations. Using self-reported drug fills to ensure consistency across all study years is another unique feature of this study. Use of self-reported drug fills overcomes several common biases of claims-based studies, including their omission of prescriptions filled at out-of-network pharmacies, free samples, and prescriptions not paid by insurance
The increases in prescription drug use and decreases in OOP drug costs in the community-dwelling Medicare population are consistent with our earlier findings that self-reported cost-related medication nonadherence significantly decreased in this population after implementation of Part D.(13
) We can now support those findings with empirical evidence about similar changes in the actual use of medications and costs. Furthermore, we found no increase in medication use following Part D in the sickest segments of the Medicare population until 2007, echoing our earlier finding that the sickest groups reported only lagged improvements in cost-related nonadherence and foregoing other needs to pay for drugs.(13
) We postulate that 2006 was a transitional period for two reasons. First, the deadline for enrollment in 2006 was delayed to May and thus that year captures partial year effects, as demonstrated by others.(6
) Second, there is some evidence that previously uninsured people had to learn to use and optimize the new insurance coverage, especially the first time entering a gap in coverage.(24
Our study has several limitations. The six years of pre-policy data provide an important comparison and context for our analyses. However, additional post-policy years would provide more clarity about the long-term impacts of implementing Part D. (MCBS drug utilization data after 2007 are not yet available.) Certainly, the first year of the new program was a transitional period and results from 2006 may underestimate the true effects of Part D; however, the extent to which 2007 data represent stable effects is still unknown. Other factors unrelated to Part D (such as contemporaneous changes in the financial condition of Medicare beneficiaries) may also have influenced the observed changes in drug use and costs both before and after implementation of Part D. Thus, our results should still be considered early evidence until longer-term data are available.
In conclusion, in comparison to historical trends, we found significant population-level increases in prescription drug use and decreases in out-of-pocket drug costs in the first and second years after implementation of Medicare Part D. However, some subgroups of beneficiaries in fair to poor health experienced only lagged changes in prescription drug use, despite immediate decreases in drug costs. Further research is needed to determine whether essential medications were most affected by implementation of Part D, and whether increased access to those medications impacted health outcomes in nationally representative populations.