Health Care Costs and Financing

Negative effects are seen when patients reach drug benefit thresholds in Medicare Part D

Medicare beneficiaries who reach their drug benefit threshold under the Part D prescription drug benefit are older, high medication users who suffer negative consequences post-threshold. According to researchers from Kaiser Permanente Colorado and the University of Colorado at Denver, those reaching this threshold had greater morbidity, more hospitalizations, and less medication adherence levels compared to non-threshold-reaching beneficiaries.

The researchers collected data on 21,349 beneficiaries participating in the Kaiser Permanente Colorado direct-pay Medicare Advantage Part D prescription drug benefit plan in 2006. A total of 1,237 (6 percent) reached their threshold of $2,250 in accumulated total prescription drug costs (approximately $750 in out-of-pocket expenses). Identical data were also gathered on 9,088 group employer retirees who did not have a drug benefit threshold component in their health plan. Those reaching their standard threshold were more likely to experience at least one hospital admission and emergency department visit compared to no-threshold beneficiaries. They also had more medical office visits and received more medications.

Medication adherence was also found to decline once beneficiaries reached their threshold. The most significant reductions in medication refill adherence were found for cholesterol-lowering agents, blood pressure medications, antidepressants, and diuretics. The researchers were unable to confirm that these decreases in adherence were associated with observed changes in the utilization of healthcare services.

This is one of the first studies to look at the health care utilization and characteristics of members who reach their drug benefit threshold under Medicare Part D. The authors underscore the need for studies of longer duration. Further investigation is necessary in order to create new benefit structures for Medicare beneficiaries and to provide them with the best possible health care. The study was supported in part by the Agency for Healthcare Research and Quality (HS15476).

See "Effects of reaching the drug benefit threshold on Medicare members' healthcare utilization during the first year of Medicare Part D," by Marsha A. Raebel, Pharm. D., Thomas Delate, Ph.D., Jennifer L. Ellis, M.S.P.H., and Elizabeth A. Bayliss, M.D., M.S.P.H., in the October 2008 Medical Care 46(10), pp.1116-1122.

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