When Annual Benefits Run Out, Older Patients May Stop Taking Drugs

SANTA MONICA, Calif., Sept. 11 -- In the days before Medicare Part D, many older patients simply stopped taking medications for chronic diseases when they reached a health plan's annual drug-benefit cap.

So found Rand Corporation investigators who studied recent private health plan beneficiaries in an effort to get a handle on how Part D's benefit gap, the so-called "doughnut hole," might affect today's seniors.

Before Medicare introduced Part D, more than half of older patients never went back to their chronic drug medications even when the drug-benefit allowance reset with the beginning of a new year, reported Geoffrey Joyce, Ph.D., of Rand, and colleagues, reported in the September/October issue of Health Affairs.

Now, with Part D, between 24% and 38% of eligible enrollees will reach the coverage gap this year, and about one-third of these are expected to reach the level at which catastrophic coverage begins, the authors wrote. "As a result, beneficiaries with moderate-to-high drug expenses, particularly the chronically ill, will face gaps in coverage and higher out-of-pocket costs, which will alter their demand for drug therapies."

Although it's too early to determine what effect the Medicare changes have on drug choices, the choices made by seniors enrolled in private health plans can provide important clues, the authors said.

"The most recent evidence on the impact of such caps comes from an analysis at Kaiser Permanente," they noted. "Members whose drug benefits were capped at ,000 had 31% lower pharmacy costs than comparable enrollees who were not subject to a cap, but the capped enrollees had higher rates of emergency department visits and non-elective hospitalizations."

In the current study, the authors looked at longitudinal data on more than 60,000 retirees from a large private employer to compare pharmacy use among patients enrolled in plans both with and without drug-benefit caps. One plan had an annual coverage limit of ,000 and a second had a ,500 cap; a third plan had no limit on drug benefits. Each plan required co-pays for prescriptions, ranging from 35% to drugs in the plan's formulary, to 60% for non-formulary drugs.

The authors looked at drug use in six broad categories: antihypertensives, cardiac drugs (including antihypertensive agents, antiarrhythmics, cardiac glycosides, anticoagulants, and cardiac drugs not elsewhere classified), antidiabetic drugs (sulfonylureas and other oral agents including metformin and glitazones), anti-ulcerants (histamine-2 receptor antagonists and proton-pump inhibitors, plus other gastrointestinal drugs not elsewhere classified), antidepressants, and NSAIDs, including Cox-2 inhibitors.

In 2005, 7% of patients in the ,000 cap plan reached the maximum benefit level, as did 13% of those on the ,500 cap plan. The median overall coverage gaps ranged from 75 to 120 days.

They found that by December, when high-spending patients in the ,500 capped plan had exhausted their benefits, their use of antidepressants, antihypertensives, antihyperlipidemics, and antidiabetic agents was 15% to 28% lower than among patients in the non-capped plans.

Patients on the capped plan who were taking drugs for which there are broadly available over-the-counter substitutes, such as NSAIDs and anti-ulcer agents, had a much greater reduction in drug use at the end of the year compared with those taking other classes of drugs. The drug utilization gap narrowed to less than 10% for five of the six drug classes by March, however.

"Put another way, the trends by therapeutic class clearly indicate relatively severe reduction in use at the end of the year for those in the capped plan, followed by increases when coverage is renewed," the authors wrote.

Among patients in a capped plan who stopped taking drugs when their benefits ran out, more than half did not resume during the first three months after benefits kicked in again.

"Given the importance of these drugs, it's distressing that the resumption rates are not higher," said co-author Dana Goldman, Ph.D. "Drug caps are a cost-saving measure, but our findings raise the issue of whether in the long run they may lead to other medical costs such as increased hospitalizations."

The authors noted that they were not able to determine whether patients who exhausted their benefits obtained prescriptions outside of the health plan, which could result in an overstatement of the impact of the plan caps on drug use. However, there is evidence to suggest that the effect of such underreporting, if any, would be small, they added.