Substitution, Spending Offsets, and Prescription Drug Benefit Design

2007 ◽  
Vol 10 (2) ◽  
Author(s):  
Martin Gaynor ◽  
Jian Li ◽  
William B Vogt
Keyword(s):  
Prescription Drug ◽  
Prescription Drugs ◽  
Outpatient Care ◽  
Drug Benefit ◽  
Medicare Beneficiaries ◽  
Benefit Design ◽  
Prescription Drug Benefit ◽  
Drug Benefits ◽  
Prescription Drug Use ◽  
Prescription Drug Benefits

Many U.S. employers have recently adopted less generous prescription drug benefits. In addition, in 2006 the U.S. began to offer prescription drug insurance to approximately 42 million Medicare beneficiaries. We used data on individual health insurance claims and benefit data from 1997 to 2003 to study how changes in consumers’ co-payments for prescription drugs affect use of and expenditure on prescription drugs, inpatient care, and outpatient care. We analyzed the effects both in the year of the co-payment change and in the year following the change. Our results show that increases in prescription drug prices reduce both use of and spending on prescription drugs. They also show that consumers substitute the use of outpatient care for prescription drug use and that about 35% of the expenditure reductions on prescription drugs are offset by increases in other spending.

What factors influence seniors’ desire for choice among health insurance options? Survey results on the Medicare prescription drug benefit

2010 ◽  
Vol 5 (4) ◽  
pp. 437-457 ◽  
Author(s):  
Thomas Rice ◽  
Yaniv Hanoch ◽  
Janet Cummings
Keyword(s):  
Prescription Drug ◽  
Prescription Drugs ◽  
Drug Benefit ◽  
Medicare Beneficiaries ◽  
Kaiser Family Foundation ◽  
Prescription Drug Benefit ◽  
Public Health Survey ◽  
The Right ◽  
Open Question ◽  
Race And Health

AbstractQuestions about the design of the new US Medicare prescription drug benefit were raised even before its passage, where one of the most heated issues has been the number of plans offered to beneficiaries. Whether beneficiaries believe that there should be extensive or limited choice is still an open question. To study this issue, we analyzed data from the Kaiser Family Foundation/Harvard School of Public Health Survey, which included 718 individuals aged 65 years and above. The survey asked these older adults (i) whether they prefer having dozens of plans or for Medicare to offer a restricted number of plans and (ii) whether they think there are too many, too few or the right amount of plans. Our findings show that the majority of beneficiaries (69%) preferred that Medicare offer a limited number of options while only 29% wanted to see dozens of plans on the market. We also examine the effect of education level, income, political affiliation, race and health status on the desire for more or fewer plans. One surprising finding is that seniors with higher education appear to prefer fewer, not more, plan choices. Overall, our results question the merit of offering so many prescription drugs plan choices to Medicare beneficiaries.

Recently Approved Medicare Provisions for Prescription Drugs and Medication Management Services

2005 ◽  
Vol 21 (2) ◽  
pp. 63-68 ◽  
Author(s):  
Mary F Powers
Keyword(s):  
Prescription Drug ◽  
Prescription Drugs ◽  
Medicare Part D ◽  
Medicare Part ◽  
Drug Benefit ◽  
Medicare Beneficiaries ◽  
Part D ◽  
Prescription Drug Benefit ◽  
Full Implementation ◽  
Management Services

Objective: To review recent changes in Medicare affecting the practice of pharmacy. Data Sources: Articles were identified through searches of MEDLINE (2003–March 2004), LEXISNEXIS ACADEMIC (2003–March 2004), and LEXISNEXIS CONGRESSIONAL databases (2003–March 2004), using the key words Medicare, pharmacist, pharmacy, and drug costs. Additional references were located through review of the bibliographies of the articles cited and through searches of the Web sites for Medicare, Social Security, and the American Pharmacists Association. Study Selection and Data Extraction: Reports about Medicare and Medicare Part D were selected. Articles describing the history of Medicare and changes that impact pharmacy were included. Data Synthesis: The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MPDIMA) provides an optional prescription drug benefit for Medicare beneficiaries in 2006 as Medicare Part D. Before its full implementation, eligible Medicare beneficiaries may qualify for a temporary Medicare-approved Drug Discount Card. The prescription drug benefits will be administered by private entities. Other provisions of the MPDIMA affect pharmacy, including a provision for medication therapy management services to ensure that the covered Part D drugs are appropriately used. This will be the first time that Medicare provides for payment of pharmacist-administered patient care services. Conclusions: Recent changes in Medicare provide Medicare beneficiaries with optional coverage for prescription drugs. Full implementation of the Medicare prescription drug benefit will occur in 2006, with an interim Drug Discount Card available through December 2005.

The Medicare Prescription Drug, Improvement and Modernization Act and the Impact on Care of People With Chronic Illness: Benefit Design and Implementation Issues

2004 ◽  
Vol 5 (2) ◽  
pp. 113-121
Author(s):  
Claudia Schlosberg
Keyword(s):  
Chronic Illness ◽  
Prescription Drug ◽  
Drug Benefit ◽  
Medicare Beneficiaries ◽  
Benefit Design ◽  
Prescription Drug Benefit ◽  
Department Of Health ◽  
Important Benefit ◽  
Medicare Program ◽  
The Impact

The Medicare Prescription Drug, Improvement and Modernization Act represents the most far-reaching and one of the most controversial reforms of the Medicare program since its enactment in 1965. The Act ushers in a new Medicare prescription drug benefit, revitalizes Medicare Advantage plans and promotes new approaches to care of Medicare beneficiaries with chronic illness. However, while the Act evidences a commitment to improving the care of beneficiaries with chronic illness, reform may prove elusive. The basic benefit design is daunting in its complexity and for certain beneficiaries, coverage may be less generous and less comprehensive than currently available coverage. To ensure appropriate transition and treatment for dual eligibles and others with chronic illness, both Congress and the Department of Health and Human Services must be prepared to address a number of important benefit design and operations issues and be willing to make mid-course corrections and adjustment as the process unfolds.

Consumer Knowledge of the Impact of a Change in Prescription Drug Benefit Design

2005 ◽  
Vol 13 (6) ◽  
pp. 413-420 ◽  
Author(s):  
Roger Feldman ◽  
Jean Abraham ◽  
Linda Davis ◽  
Caroline Carlin
Keyword(s):  
Prescription Drug ◽  
Drug Benefit ◽  
Consumer Knowledge ◽  
Benefit Design ◽  
Prescription Drug Benefit ◽  
The Impact

Demand for a Medicare Prescription Drug Benefit: Exploring Consumer Preferences under a Managed Competition Framework

2003 ◽  
Vol 40 (2) ◽  
pp. 169-183 ◽  
Author(s):  
Richard R. Cline ◽  
David A. Mott
Keyword(s):  
Prescription Drug ◽  
Consumer Choice ◽  
Consumer Preferences ◽  
Drug Benefit ◽  
Control Mechanisms ◽  
Managed Competition ◽  
Medicare Beneficiaries ◽  
Prescription Drug Benefit ◽  
Medicare Program ◽  
Using Data

Several proposals for adding a prescription drug benefit to the Medicare program rely on consumer choice and market forces to promote efficiency. However, little information exists regarding: 1) the extent of price sensitivity for such plans among Medicare beneficiaries, or 2) the extent to which drug-only insurance plans using various cost-control mechanisms might experience adverse selection. Using data from a survey of elderly Wisconsin residents regarding their likely choices from a menu of hypothetical drug plans, we show that respondents are likely to be price sensitive with respect to both premiums and out-of-pocket costs but that selection problems may arise in these markets. Outside intervention may be necessary to ensure the feasibility of a market-based approach to a Medicare drug benefit.

scholarly journals The Value of Experience: Differences in Knowledge among Medicare Beneficiaries

2005 ◽  
Vol 42 (3) ◽  
pp. 266-280
Author(s):  
Merrile Sing ◽  
Beth Stevens
Keyword(s):  
Managed Care ◽  
Prescription Drug ◽  
Formal Education ◽  
Life Experience ◽  
Care Plan ◽  
Medicare Advantage ◽  
Medicare Beneficiaries ◽  
Drug Benefits ◽  
Prescription Drug Plan ◽  
Prescription Drug Benefits

The Medicare Advantage program gives Medicare beneficiaries the opportunity to choose from an array of insurance options instead of receiving prescribed benefits. In 2006, beneficiaries who want prescription drug benefits will need to enroll in a Medicare managed care plan or a private prescription drug plan. To examine awareness and use of Medicare information programs, and the extent to which these programs are associated with beneficiary knowledge about Medicare and managed care, we conducted a national survey of Medicare beneficiaries six to 12 months after the nationwide mailing of the Medicare & You 2000 handbook. Beneficiary information-gathering behavior and experience with Medicare managed care were more highly associated with knowledge about Medicare managed care than formal education, age, income, or membership in a managed care plan before enrolling in Medicare. Practical life experience appears to outweigh traditional factors in beneficiary knowledge of Medicare and managed care.

scholarly journals The Costs of A Medicare Prescription Drug Benefit

2002 ◽  
Vol 2 (1) ◽  
Author(s):  
Dana P Goldman ◽  
Geoffrey F Joyce ◽  
Jesse Dylan Malkin
Keyword(s):  
Prescription Drug ◽  
Status Quo ◽  
Drug Benefit ◽  
Medicare Beneficiaries ◽  
Prescription Drug Benefit ◽  
Outpatient Prescription ◽  
The Status ◽  
Out Of Pocket Expenses ◽  
Very High ◽  
Out Of Pocket Costs

Abstract Medicare does not have an outpatient prescription drug benefit. Recently, there has been renewed interest in adding a prescription drug benefit to the program. In this paper, we present a microsimulation model to predict drug expenditures in 2001 for a representative cohort of Medicare beneficiaries under the status quo and three different plans: (1) a catastrophic plan modeled on the Medicare Catastrophic Coverage Act (PL 100-360), which was passed in 1988 but repealed one year later after higher-income Medicare beneficiaries protested new premiums, (2) a zero-deductible plan that caps out-of-pocket expenses at $4,000 per year, and (3) a zero-deductible plan that does not cap out-of-pocket expenses. We use data from a representative sample of Medicare Part B beneficiaries from the 1995 Medicare Current Beneficiary Survey (MCBS) Cost and Use file. Under the status quo, drug expenses average $1,459 per beneficiary, out-of-pocket costs average $646, and 8.2% of the population has very high expenses (defined as more than $2,000 out-of-pocket for drugs). Under a catastrophic plan, average annual drug expenses are $1,344, out-of-pocket costs are $645, and 6.8% of beneficiaries have very high expenses. Under a zero-deductible plan that does not cap out-of-pocket expenses average annual drug expenses are $1,395, out-of-pocket expenses are $459, and 5.3% of beneficiaries would have very high expenses. Under a zero-deductible plan that caps out-of-pocket expenses at $4,000 per year, average annual drug expenses are $1,414, out-of-pocket expenses are $442, and 5.5% of beneficiaries have very high expenses.

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