What is the Impact of Medicare Part D? (Part 1)

June Chen, MD

Many Medicare beneficiaries are still unaware of, or confused by, the Medicare Prescription Drug Improvement and Modernization Act. Otherwise known as the Part D prescription drug program, this act was implemented in 2003 to subsidize the cost of medications for the elderly and the disabled, and in 2006, the Medicare program started offering outpatient prescription drug benefits. However, these benefits are controlled by complex benefit structures which can lead to confusion and financial burden.

Part D includes a coverage gap, starting at $2250 in total drug costs and ending after $3600 of out-of-pocket spending, during which the Medicare beneficiary is responsible for all of their drug costs. A recent study in the Journal of the American Medical Association reported that less than half of Medicare beneficiaries were aware of this coverage gap .

In telephone interviews with 2000 Medicare subscribers who were enrolled in the Kaiser Permanente-Northern California's Medicare Advantage Prescription Drug plan, the researchers found that only 40% were aware that their drug plan included a coverage gap. Of these beneficiaries, 36% reported that, because of their prescription drug costs, they switched to generic drugs, didn't fill their prescriptions, or experienced financial hardship. The researchers commented that these findings reinforce the need for better education and tools for Medicare Part D beneficiaries on how to limit out-of-pocket expenditures and benefit from the prescription drug program.

Source
JAMA. 2008;299(16):1929-1936.

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