Medicare Beneficiaries Face Growing Out-Of-Pocket Burden For Specialty Drugs While In Catastrophic Coverage Phase.
The Affordable Care Act (ACA) includes provisions to reduce Medicare beneficiaries' out-of-pocket spending for prescription drugs by gradually closing the coverage gap between the initial coverage limit and the catastrophic coverage threshold (known as the doughnut hole) beginning in 2011. However, Medicare beneficiaries who take specialty pharmaceuticals could still face a large out-of-pocket burden because of uncapped cost sharing in the catastrophic coverage phase. Using 2008-12 pharmacy claims data from a 20 percent sample of Medicare beneficiaries, we analyzed trends in total and out-of-pocket spending among Medicare beneficiaries who take at least one high-cost specialty drug from the top eight specialty drug classes in terms of spending. Annual total drug spending per specialty drug user studied increased considerably during the study period, from $18,335 to $33,301, and the proportion of expenditures incurred while in the catastrophic coverage phase increased from 70 percent to 80 percent. We observed a 26 percent decrease in mean annual out-of-pocket expenditures incurred below the catastrophic coverage threshold, likely attributable to the ACA's doughnut hole cost-sharing reductions, but increases in mean annual out-of-pocket expenditures incurred while in the catastrophic coverage phase offset these reductions almost entirely. Policy makers should consider implementing limits on patients' out-of-pocket burden.
Erin Trish (etrish@healthpolicy.usc.edu) is an assistant research professor at the Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, in Los Angeles.
Erin
E
Trish
Jianhui Xu is a doctoral student at the Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California.
Jianhui
J
Xu
Geoffrey Joyce is an associate professor at the Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California.
Geoffrey
G
Joyce
D000368:Aged; D000369:Aged, 80 and over; D016208:Databases, Factual; D016527:Drug Costs; D005260:Female; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D019458:Insurance Coverage / Q000191:economics* / Q000706:statistics & numerical data; D007354:Insurance, Major Medical / Q000191:economics*; D008297:Male; D006278:Medicare / Q000191:economics* / Q000706:statistics & numerical data; D020380:Needs Assessment; D058991:Patient Protection and Affordable Care Act / Q000191:economics; D055553:Prescription Drugs / Q000145:classification / Q000191:economics*; D012189:Retrospective Studies; D018570:Risk Assessment; D012923:Social Class; D014481:United States
D055553:Prescription Drugs
Health Economics; Health Reform; Insurance Coverage < Insurance; Pharmaceuticals