What can pharmacists’ do about the Medicare Part D Donut hole and reimbursement? A six-state survey

The Affordable Care Act has put in place policies to gradually close the Medicare Part D coverage gap (donut hole). I examine the effect of this gradual closure on total and out-of-pocket prescription drug expenditures, as well as the number of prescriptions filled. The analysis shows a general increase in prescription use. There are also heterogeneous effects, with higher total expenditure groups seeing a decrease in their out-of-pocket prescription expenditures. This suggests that closure of the “donut hole” has led to an increase in prescription use that was previously curtailed and had an impact on the financial risk faced by Medicare recipients. This has implications for trends in prescription use and Medicare expenditures in the future, as the coverage gap is closed further.

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Abstract 4765: The impact of the Medicare Part D donut hole closure on use and out-of-pocket costs for aromatase inhibitors

10.1158/1538-7445.am2018-4765 ◽

2018 ◽

Author(s):

Ilana Graetz ◽

Janeane N. Anderson ◽

Cameron M. Kaplan

Keyword(s):

Aromatase Inhibitors ◽

Medicare Part D ◽

Medicare Part ◽

Part D ◽

Donut Hole ◽

The Impact ◽

Hole Closure ◽

Out Of Pocket Costs

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The Response of Drug Expenditure to Nonlinear Contract Design: Evidence from Medicare Part D *

The Quarterly Journal of Economics ◽

10.1093/qje/qjv005 ◽

2015 ◽

Vol 130 (2) ◽

pp. 841-899 ◽

Cited By ~ 56

Author(s):

Liran Einav ◽

Amy Finkelstein ◽

Paul Schrimpf

Keyword(s):

Medicare Part D ◽

Drug Expenditure ◽

Medicare Part ◽

Simple Extension ◽

Drug Spending ◽

Baseline Model ◽

Part D ◽

Insurance Contracts ◽

Donut Hole ◽

Using Data

Abstract We study the demand response to nonlinear price schedules using data on insurance contracts and prescription drug purchases in Medicare Part D. We exploit the kink in individuals’ budgets set created by the famous “donut hole,” where insurance becomes discontinuously much less generous on the margin, to provide descriptive evidence of the drug purchase response to a price increase. We then specify and estimate a simple dynamic model of drug use that allows us to quantify the spending response along the entire nonlinear budget set. We use the model for counterfactual analysis of the increase in spending from “filling” the donut hole, as will be required by 2020 under the Affordable Care Act. In our baseline model, which considers spending decisions within a single year, we estimate that filling the donut hole will increase annual drug spending by about $150, or about 8 percent. About one-quarter of this spending increase reflects anticipatory behavior, coming from beneficiaries whose spending prior to the policy change would leave them short of reaching the donut hole. We also present descriptive evidence of cross-year substitution of spending by individuals who reach the kink, which motivates a simple extension to our baseline model that allows—in a highly stylized way—for individuals to engage in such cross-year substitution. Our estimates from this extension suggest that a large share of the $150 drug spending increase could be attributed to cross-year substitution, and the net increase could be as little as $45 a year.

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Does Closing the Donut Hole Reduce Financial Burdens Among Medicare Part D Beneficiaries?

Innovation in Aging ◽

10.1093/geroni/igab046.3261 ◽

2021 ◽

Vol 5 (Supplement_1) ◽

pp. 906-906

Author(s):

Yalu Zhang ◽

Lan Liu ◽

Jingjing Sun ◽

Xinhui Zhang ◽

Jiling Sun ◽

...

Keyword(s):

Prescription Drugs ◽

Medical Expenditure Panel Survey ◽

Financial Burden ◽

Medicare Part D ◽

Medical Expenditure ◽

Medicare Part ◽

Absolute Poverty ◽

Part D ◽

Donut Hole ◽

Financial Burdens

Abstract The Medicare Part D donut hole has been gradually closed since 2010. But it is still unclear how it has impacted the beneficiaries’ relative financial burdens, especially in the later stage of the closing plan. The measurement of catastrophic health expenditure induced by prescription drugs (CHE-Rx) reflects the relative financial burdens to beneficiaries’ household income, which bears more information than the measure of dollar-value expenses or the absolute poverty line used in prior studies. Using the Medical Expenditure Panel Survey 2008-2017 longitudinal national representative data and the method of difference-in-differences, this study found that the donut hole closing policy was associated with more usage of prescription drugs (b=2.84, p=0.023) and a higher likelihood of experiencing CHE-Rx (b=2.4%, p=0.011) among those who fell in the donut holes. Besides, the results show that the donut hole closing policy did not generate any immediate effects on prescription drug usage, CHE, and CHE-Rx. For the first time, this paper examined both the aggregated and marginal impact of the policy implementation, which had closed by an additional 35% between 2013 and 2017, on the relative financial burden among the beneficiaries.

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Financial Burden for Patients With Chronic Myeloid Leukemia Enrolled in Medicare Part D Taking Targeted Oral Anticancer Medications

Journal of Oncology Practice ◽

10.1200/jop.2016.014639 ◽

2017 ◽

Vol 13 (2) ◽

pp. e152-e162 ◽

Cited By ~ 14

Author(s):

Chan Shen ◽

Bo Zhao ◽

Lei Liu ◽

Ya-Chen Tina Shih

Keyword(s):

Chronic Myeloid Leukemia ◽

Myeloid Leukemia ◽

Financial Burden ◽

Medicare Part D ◽

Drug Costs ◽

Medicare Part ◽

High Price ◽

Part D ◽

Coverage Gap ◽

Donut Hole

Purpose: The number of targeted oral anticancer medications (TOAMs) has grown rapidly in the past decade. The high cost of TOAMs raises concerns about the financial aspect of treatment, especially for patients enrolled in Medicare Part D plans because of the coverage gap. Methods: We identified patients with chronic myeloid leukemia (CML) who were new TOAM users from the SEER registry data linked with Medicare Part D data, from years 2007 to 2012. We followed these patients throughout the calendar year when they started taking the TOAMs and examined their out-of-pocket (OOP) payments and gross drug costs, taking into account their benefit phase, plan type, and cost share group. Results: We found that 726 (81%) of the 898 patients with CML who received TOAMs had reached the catastrophic phase of their Medicare Part D benefit within the year of medication initiation, with a large majority of patients reaching this phase in less than a month. Patients without subsidies showed a clear pattern of a spike in OOP payments when they began treatment with TOAMs. The OOP payment for patients with subsidies was substantially lower. The monthly gross drug costs were similar between patients with and without subsidies. Conclusion: Patients experience quick entry and exit from the coverage gap (also called the donut hole) as a result of the high price of TOAMs. Closing the donut hole will provide financial relief during the initial month(s) of treatment but will not completely eliminate the financial burden.

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