KHN Morning Briefing

Summaries of health policy coverage from major news organizations

New Study Finds Positive Developments, Persistent Problems In Medicare Drug Plan

A new study finds more seniors are covered by a Medicare drug plan and report greater savings, but gaps in coverage and other problems still persist.

U.S. News & World Report/HealthDay News reports: "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." The Henry J. Kaiser Family Foundation led the study that assessed access and affordability and appears in the July 23 issue of the New England Journal of Medicine (note: KHN is a program of Kaiser Family Foundation).

U.S. News & World Report notes: "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." Currently 59 percent of Medicare's beneficiaries have coverage through a Part D standalone plan or through a Medicare Advantage plan.  According to U.S. News, "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." The publication also reports: "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."

The paper highlights problems with the "doughnut hole": "Studies show that seniors who hit the coverage gap start shirking on their medication regimens, posing serious risks for people with chronic conditions, [Tricia] Neuman [director of Kaiser's Medicare Policy Project] observed. And while low-income seniors may qualify for subsidies to help pay the Part D premiums 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" (Pallarito, 7/22).

The AP also reports: "One of the biggest concerns during the Medicare drug benefit debate was that private insurers wouldn't want to offer the drug plans. That turned out not to be the case. Seniors now have dozens of Medicare drug plans to choose from, each with its own list of covered drugs, premiums, copays and deductibles. But seniors do not always pick the cheapest plan despite having many choices, the report found. 'It's still a work in progress,' said lead author Tricia Neuman, director of Kaiser's Medicare Policy Project" (Chang, 7/22).

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