Medicare Part D Helps Drive Down Diabetes Out-of-Pocket Costs

Alicia Ault

November 15, 2016

Medicare's Part D prescription drug benefit appears to have lowered out-of-pocket costs for people with diabetes, even for those who chose not to buy the coverage, according to a new study.

"All in the Medicare group benefited from lower out-of-pocket spending regardless of their Part D status," write researchers from the Seoul National University College of Nursing, Columbia University School of Nursing, and the Joslin Diabetes Center at Harvard Medical School, in a paper published online November 1 in Diabetes Care.

Diabetes affects at least a quarter of American adults over age 65, and the medication burden is particularly high for these older people, the authors note.

In one survey, older adults with diabetes reported taking an average of eight drugs a day, at a cost of almost $19,000 a year, according to the researchers. And 16% of older adults with diabetes report nonadherence to at least one medication due to cost concerns, they add.

For this work, they compared costs for Medicare-eligible beneficiaries with diabetes in the pre-Part D period of 2000–2005 with the postimplementation period of 2006–2011. They also tallied costs for people aged 50 to 60 who had diabetes but were not Medicare recipients for both time periods.

When compared with the pre-Part D period, prescription drug spending for people with diabetes — regardless of whether they had a Part D plan — declined by 13.5% after the benefit's implementation.

Krista Maier, director of public policy for the American Diabetes Association, said it was not unexpected that the implementation of Part D helped reduce out-of-pocket costs.

But she said it was startling that out-of-pocket costs decreased by just 13.5% after Part D began. "I was surprised by actually how small the difference seemed to be in the cost sharing," Ms Maier told Medscape Medical News.

Decline Is "Noteworthy" in Context of Rising Costs for Diabetes Drugs

The authors, however, found the decline "particularly noteworthy, as it reflects a period of time where overall diabetes expenditures and medication costs have increased, with the highest costs attributed to older adults with diabetes."

It was perhaps also notable as not every beneficiary had purchased a Part D plan.

In 2006, only 46% of Medicare beneficiaries were enrolled in Part D. By 2011, that figure had risen to 52%. The upward trend has continued, according to the Kaiser Family Foundation, which reported in 2015 that 39 million Medicare beneficiaries (72%) were enrolled in a Part D plan.

Before Part D went into effect, individuals with diabetes on Medicare had 10.8% higher spending than younger, non-Medicare counterparts — around $1500 per year, compared with $1000 annually.

After Part D, Medicare beneficiaries who had prescription drug coverage had an almost 20% decrease in costs compared with younger, non-Medicare individuals with diabetes.

And costs were 5.3% lower for Medicare beneficiaries with diabetes who enrolled in Part D — at around $953 — compared with those who did not take Part D coverage, who had a little more than $1000 in out-of-pocket costs.

The authors reported some limitations, including the fact that their methods may not have definitively answered whether Part D was the primary reason for lower out-of-pocket costs "or if patients with high out-of-pocket spending chose other prescription drug insurance options rather than Medicare Part D."

But "Doughnut Hole" Problematic, Calls to Close It

The researchers also raise a red flag about the Medicare Part D coverage gap, also known as the "doughnut hole."

According to the law creating the Part D program, enrollees had to pay up to a specified cap on out-of-pocket spending, after which they would hit a coverage gap, making them liable for the full cost of their medications until they reached the "catastrophic" limit. At that point, Medicare would cover the full cost of their pharmaceuticals.

Sixty percent of Part D enrollees fell into the gap in 2006. By 2011, only 41% hit the doughnut hole. That means that two of five Medicare beneficiaries fell into the gap in 2011, said the authors.

"Although earlier studies have found that having a diagnosis of diabetes is significantly correlated with coverage-gap entry, our finding is significantly higher than previously reported," they wrote.

That's of concern because the federal government has determined that a quarter of Part D recipients stop taking their medications when they fall into the doughnut hole, say the authors.

Ms Maier said the coverage gap is a significant concern, which is why the ADA has supported closing it sooner than 2020, as is scheduled under the Affordable Care Act.

The study was supported by the Columbia University School of Nursing Center for Health Policy and Sigma Theta Tau International Honor Society of Nursing Alpha Zeta Chapter. The investigators reported no relevant financial relationships.

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Diabetes Care. Published online November 1, 2016. Abstract


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