Dataset Information

Estimating the effects of prescription drug coverage for Medicare beneficiaries.

ABSTRACT:

Objective

To identify the effect of insurance coverage on prescription utilization by Medicare beneficiaries.

Data sources/study setting

Secondary data from the 1999 Medicare Current Beneficiary Survey (MCBS) Cost and Use files, a nationally representative survey of Medicare enrollees.

Study design

The paper uses a cross-sectional design with (1) a standard regression framework to estimate the impact of prescription coverage on utilization controlling for potential selection bias with covariate control based on the Diagnostic Cost Group/Hierarchical Condition Category (DCG/HCC) risk adjuster, and (2) a multistage residual inclusion method using instrumental variables to control for selection bias and identify the insurance coverage effect.

Data collection/extraction methods

Data were extracted from the 1999 MCBS. Study inclusion criteria are community-dwelling MCBS respondents with full-year Medicare enrollment and supplemental medical insurance with or without full-year drug benefits. The final sample totaled 5,270 Medicare beneficiaries.

Principal findings

Both the model using the DCG/HCC risk adjuster and the model using the residual inclusion method produced similar results. The estimated price elasticity of demand for prescription drugs for the Medicare beneficiaries in our sample was -0.54.

Conclusions

Our results confirm that selection into prescription coverage is predictable based on observable health. Our results further confirm prior estimates of price sensitivity of prescription drug demand for Medicare beneficiaries, though our estimate is slightly above prior results.

SUBMITTER: Shea DG

PROVIDER: S-EPMC1955253 | biostudies-literature | 2007 Jun

REPOSITORIES: biostudies-literature

ACCESS DATA

Publications

Estimating the effects of prescription drug coverage for Medicare beneficiaries.

Shea Dennis G DG Terza Joseph V JV Stuart Bruce C BC Briesacher Becky B

Health services research 20070601 3 Pt 1

<h4>Objective</h4>To identify the effect of insurance coverage on prescription utilization by Medicare beneficiaries.<h4>Data sources/study setting</h4>Secondary data from the 1999 Medicare Current Beneficiary Survey (MCBS) Cost and Use files, a nationally representative survey of Medicare enrollees.<h4>Study design</h4>The paper uses a cross-sectional design with (1) a standard regression framework to estimate the impact of prescription coverage on utilization controlling for potential selectio ...[more]

PMID: 17489897

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Project description:The objective is to estimate the take-up of the Medicare Part D Low-Income Subsidy (LIS) among Medicare beneficiaries with diabetes and examine differences in out-of-pocket costs and prescription drug use between LIS enrollees and LIS-eligible non-enrollees. The LIS reduces out-of-pocket drug costs for low-income beneficiaries; however, not all LIS-eligible individuals are enrolled. Take-up of the LIS, and consequences of forgoing this benefit among beneficiaries with diabetes, remains unknown. Health and Retirement Study linked to Medicare administrative data from 2008 to 2016. We conducted two analyses among beneficiaries with diabetes. First, we estimated LIS take-up stratified by income (≤100% of the Federal Poverty Level [FPL] and >100% to ≤150% of FPL). Second, to assess the consequences of forgoing the LIS among near-poor beneficiaries (incomes >100% to ≤150% of FPL), we conducted propensity score-weighted regression analyses to compare out-of-pocket costs, the prescription drug use, and cost-related medication non-adherence among LIS enrollees and LIS-eligible non-enrollees. N/A. Among Medicare beneficiaries with diabetes, 68.1% of those with incomes >100% to ≤150% of FPL received the LIS, while 90.3% with incomes ≤100% of FPL received the LIS. Among near-poor beneficiaries, LIS-eligible non-enrollees incurred higher annual out-of-pocket drug spending ($518; 95 [in USD]% CI: $370 [in USD], $667 [in USD]; p < 0.001), filled 7.3 fewer prescriptions for diabetes, hypertension, and hyperlipidemia drugs (95% CI: -11.1, -3.5; p < 0.001), and were 8.9 percentage points more likely to report skipping drugs due to cost (95% CI: 0.3, 18.0; p = 0.04), all compared to LIS enrollees. Despite providing substantial financial assistance with prescription drug costs, the LIS is under-utilized among beneficiaries with chronic conditions requiring routine medication use. As policy makers discuss Part D reforms to address rising out-of-pocket drug costs, they should consider strategies to increase participation in existing programs that alleviate cost burdens among low-income Medicare beneficiaries.

Project description:BackgroundMedicare Part D prescription drug plans (PDPs) implemented in January 2006 are designed to improve beneficiaries' access to pharmaceuticals and use market competition to yield affordable drug costs. Variations in estimated PDP costs for beneficiaries living in different states have not previously been characterized.ObjectiveTo describe variations in the estimated costs of PDPs (plan premium, copays, and coinsurance) within and across states.DesignTo estimate PDP costs based on 4 actual patient cases that exemplify common conditions and prescription drug combinations for Medicare beneficiaries, we used the online tool provided by the Centers for Medicare and Medicaid Services.MeasurementsPrincipal study outcomes included (a) variation across states in the estimated annual cost of the lowest-cost PDP for each case and (b) variation in the estimated affordability of the lowest-cost PDPs across states, based on cost-of-living-adjusted median income for zero-earner households.ResultsFor all 4 patient cases, we found substantive within-state and between-state differences in the estimated costs of Medicare PDPs incurred by beneficiaries. The estimated annual costs to beneficiaries of the lowest-cost PDPs varied across states by as much as $320 for medications in the least expensive scenario, and by as much as $13,000 for the most expensive scenario. On average across states, a beneficiary with cost-of-living-adjusted median income would expect to spend 3%-28% of annual income to pay for medications in the lowest-cost PDPs in the 4 patient cases. The affordability of the lowest-cost plans varied across states, and for 2 of the 4 cases the lowest-cost PDP estimates were negatively correlated with cost-of-living-adjusted median income.ConclusionsSubstantive differences in estimated PDP costs are evident across states for patients with common Medicare conditions. Importantly, the lowest-cost plans were not proportionally affordable with respect to state-specific cost-of-living-adjusted median income. Refinement of the Medicare drug program may be needed to improve national balance in PDP affordability for beneficiaries living in different states.

Dataset Information

Estimating the effects of prescription drug coverage for Medicare beneficiaries.

Objective

Data sources/study setting

Study design

Data collection/extraction methods

Principal findings

Conclusions

Publications

Estimating the effects of prescription drug coverage for Medicare beneficiaries.

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