Medicare Drug Plan Still Needs Work

WEDNESDAY, July 22 (HealthDay News) — The number of older Americans with access to prescription drug coverage has ballooned since Medicare’s Part D program was rolled out almost four years ago, a new analysis finds, yet seniors’ ability to pay for needed medications remains a concern due to limitations in coverage and rising drug plan costs.

“Based on nearly four years of experience, the Medicare drug benefit has helped seniors by expanding access to prescription drug coverage and lowering out-of-pocket costs, particularly helping those who previously lacked drug coverage,” said Tricia Neuman, director of the Medicare Policy Project at the Henry J. Kaiser Family Foundation, who led the analysis. “But Medicare Part D is still a work in progress.”

Neuman’s review of the program, which assesses access and affordability, appears in the July 23 issue of the New England Journal of Medicine.

David Lipschutz, staff attorney for California Health Advocates, a nonprofit advocacy and education outfit, said the analysis of the program, while thorough, was “a little more positive” than he might have given. “I think when looking at Part D, you clearly have to acknowledge a lot more people have access to prescription drug coverage. But Part D has also had a significant impact, too, and has actually left some people worse off.”

He noted that low-income seniors who are “dually eligible” for both Medicare and Medicaid were switched from Medicaid drug coverage to Medicare Part D. In California, that shift resulted in seniors losing a relatively rich array of benefits. In general, the commercial plans in which they were forced to enroll offer more-limited drug formularies, greater cost-sharing and the potential for greater barriers to accessing care because of various utilization review techniques, he explained.

Unlike Medicare’s hospital and medical insurance programs, Part D benefits are offered through private insurers and drug plans that contract with the government. Often seniors must choose among dozens of plans in a region.

Enrollment in Part D began in November 2005. By the end of the first enrollment period, about 90 percent of all Medicare beneficiaries had drug coverage, according to the report. That’s up from 66 percent in 2004.

Today, 59 percent of Medicare’s 45.2 million beneficiaries are enrolled in Part D through a standalone prescription drug plan or a “Medicare Advantage” (HMO) drug plan. Thirty-one percent have retiree drug coverage or some other type of drug coverage. That leaves some 4.5 million without any coverage at all, the researchers report.

“People on Medicare who are still without drug coverage include beneficiaries who are relatively healthy and take few drugs who may not think they need this type of insurance,” Neuman explained. Others who lack coverage “would likely benefit from having Part D coverage, but for one reason or another are unaware that they need to sign up to get it or are stymied by the process.”

A recent University of Pittsburgh study, also published in the New England Journal of Medicine, found that seniors’ spending on drugs increased after enrolling in Part D, while spending on medical costs declined. Researchers said that suggests people are getting better control of their medical conditions.

Neuman’s paper highlights several concerns with the program, one being the infamous gap in drug coverage known as the “doughnut hole.” Once seniors reach an initial coverage limit, they are responsible for any additional drug costs incurred up to a “catastrophic” limit, at which point coverage kicks in again.

Studies show that seniors who hit the coverage gap start shirking on their medication regimens, posing serious risks for people with chronic conditions, Neuman observed.

And while low-income seniors may qualify for subsidies to help pay the Part D premium and cost-sharing, more than 2 million elderly and disabled people are not getting those subsidies, she found.

Meanwhile, premiums and cost-sharing are on the rise, suggesting that seniors may not be in the best plan for their particular needs. Between 2006 and 2009, the weighted average monthly premium rose 35 percent, with the steepest increases among some of the more popular plans.

Thomas Rice, a professor in the department of health services at the University of California, Los Angeles, School of Public Health, says more needs to be done to help Medicare beneficiaries make better choices.

“People are not choosing the plan that’s cheapest for them,” said Rice, who noted that many older Americans have difficulty navigating the Medicare Web site to compare benefits and costs. Seniors focus too much on the premium instead of the total cost of coverage, and very few switch plans from year to year. Rice guesses that plan sponsors know this and “try to make sure their premiums look pretty cheap.”

Lipschutz’s best advice for seniors: Contact your State Health Insurance Assistance Program for help walking though your options. “Do your homework each and every year,” he said. “It’s not a one-time deal.”