Blog | Monday, September 28, 2015

Medicare Part D--the insurance plan to cover medication for seniors: has it helped?


In 2003 the Medicare Modernization Act added a prescription drug plan to the benefits available to seniors and disabled adults. The act did a few other things, including introducing health savings accounts and defining Medicare Advantage Plans. The prescription drug plan rolled out in 2006, after which time seniors who bought the extra coverage had some help paying for their ever more expensive drugs. Today the government pays about $70 billion per year to provide this service, 11% of the total cost of Medicare.

The purpose of Medicare Part D was to allow seniors, often the most financially vulnerable of our patients, to be able to afford to pay for medications without impoverishing themselves. Since medications are such an important part of treating the diseases of aging, the government hoped that seniors who were able to pay for necessary medications would be healthier, requiring fewer hospitalizations and emergency room visits. This improvement seemed likely to, at least partially, offset the costs of the program.

Medicare Part D is a private insurance plan which costs the insured, on average, $30 a month and pays some or all of the costs of prescription drugs, depending on how expensive they are. Different plans are different, but most stop paying after having paid out $2,970, but will pay all but a small amount once the patient's out of pocket costs exceed $4,750. The period of time during which the patient must pay all of their drug costs is called, euphemistically, the “donut hole.” Since the total cost of medications is not covered by the premiums people pay, Medicare subsidizes the difference.

In June, the Annals of Internal Medicine published an article which looked at the health benefits experienced by patients on Medicare due to Part D. They were unable to detect any improvement in health or utilization of hospital or emergency room services in Medicare recipients after the initiation of part D in 2006. They did find, however, a 14% increase in the use of prescription drugs. The study certainly would not be able to detect the fact that some seniors certainly did benefit by being able to afford life-saving medications, but on the level of the total population of patients on Medicare, there was no evidence that Part D improved health.

In some ways, Part D coverage is wonderful, despite this study's results. It is definitely less common, since its inception in 2006, to see older people stopping their medications because they can't pay for them. It is also less common for patients to have to choose between having money for food or doctors' appointments and paying for prescriptions. Sometimes I find that, because of the occasionally wonderful oddities of insurance, Medicare insured patients can actually afford the newest and best drug that truly has a positive impact on their lives. The ability to take a drug with a more convenient dosing schedule or with fewer side effects may not keep a patient out of the hospital but it can surely improve their quality of life. Having to stop a medication because of the “donut hole” coverage gap can lead to emergency room visits or hospitalizations, however. A much more expensive Part D without a “donut hole” might have a more impressive outcome.

On the other hand, however, prescription drug coverage that leads to a 14% higher utilization of medications might very well lead to worse health outcomes, which could help explain the findings of this study. In the years since Part D was rolled out, there has been a huge increase in the amounts of opiate pain medications prescribed, and many of the patients who use these are seniors. The epidemic of chronic prescription opiate use and abuse often reduces older peoples' ability to get around and increases falls. Other prescription drugs, even those felt to be pretty much harmless, often have interactions that are much more prominent in bodies that are aging. Side effects are also more common as we age, and can be devastating. Being able to afford more drugs undoubtedly can increase the risk of hospitalization, emergency room visits and disability in a significant subset of patients on Medicare.

When Medicare Part D was adopted it was clear that it benefited the pharmaceutical industry. It was expected, however, to be a win/win situation, with newly insured patients healthier as a result of their improved access to medications. The bill included the requirement that the government not be able to negotiate drug prices with drug companies, which the Veteran's Administration is allowed to do. This results in considerably higher costs for drugs for Medicare recipients than for VA insured patients. So Part D is expensive, and is probably considerably more expensive than it needs to be. People do like being able to get any medication prescribed or recommended by their physician, which is a limitation in a system like the VA's where there is a pretty set and pretty narrow formulary of drugs available. But formularies don't define which medication a patient can take, only which one will be provided at low cost by the dispenser. Negotiating prices within Medicare Part D, with an associated formulary could still allow choice and probably save lots of money.

Does Medicare Part D prescription drug coverage help? It depends on the patient. It clearly does help the person on a fixed budget who finds him or herself in need of several medications which might add up to a few hundred dollars a month or more. A healthy but not wealthy 70 year old might have a sudden heart attack and find that he has diabetes which he had known nothing about having not visited a doctor for years. That patient might well be discharged from the hospital on 6 new medications which would throw his budget into an uproar, but might well keep him in good health for years. For patients with fewer needs or more abundant income, prescription drug coverage may do no good at all. For some patients whose ability to afford medications means that they will take ones which adversely affect their health, Part D is a hazard. Certainly 70 billion dollars a year and 11% of the healthcare budget is pretty pricey. The Medicare drug benefit probably needs a major overhaul in light of the data that it does not appear to have a significant or cost saving health impact on the population.

Janice Boughton, MD, ACP Member, practiced in the Seattle area for four years and in rural Idaho for 17 years before deciding to take a few years off to see more places, learn more about medicine and increase her knowledge base and perspective by practicing hospital and primary care medicine as a locum tenens physician. She lives in Idaho when not traveling. Disturbed by various aspects of the practice of medicine that make no sense and concerned about the cost of providing health care to every American, she blogs at Why is American Health Care So Expensive?, where this post originally appeared.