Now, keep up to date with daily feeds of newly posted stories about America's Seniors...click on the box to the left

Medicare Part D Beneficiaries cut back on Prescription Drugs by 14% after reaching 'Doughnut Hole' Coverage Gap, study finds

[Feb 03, 2009] Adding coverage for generic drugs during the "doughnut hole" in the Medicare prescription drug benefit could help offset a decreased use of medications during the period, according to a study published Tuesday on the Web site of the policy journal Health Affairs, the Pittsburgh Post-Gazette reports.

Under the Medicare drug plan, beneficiaries have an initial $250 deductible for prescriptions, then a 25% copayment until they reach $2,250 in payments.

At this point, the doughnut hole takes effect and requires that beneficiaries pay full price for drugs until costs have reached $5,100, after which catastrophic coverage takes effect and about 95% of costs are covered by Medicare.

According to the study, Medicare drug benefit beneficiaries decrease their use of medications by 14% upon reaching the coverage gap.

For the study, University of Pittsburgh Graduate School of Public Health Assistant Professor of health economics Yuting Zhang and colleagues examined the drug buying habits of more than 11,000 Medicare beneficiaries.

The researchers found that about 25% of beneficiaries reached the coverage gap and about 4% reached the $5,100 threshold, making them eligible for catastrophic coverage.

 According to the study, those reaching the doughnut hole were typically people with chronic illnesses who filled an average of five prescriptions each month.

Along with cutting back on medications, these beneficiaries also stopped using an average of one in five prescriptions during the coverage gap.

However, those with generic drug coverage did not reduce their use of medications after reaching that phase. Generic drugs typically cost about one-fourth as much as brand-name treatments.

The report states that "one can assume not only that the lack of coverage in the doughnut hole had adverse health consequences but also that it could have increased costs for hospital and physician services."

The authors suggest that beneficiaries' contribution to the first phase of the plan could be slightly increased to offset the added expense of generic coverage (Twedt, Pittsburgh Post-Gazette, 2/3).

The study is available online.