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Fewer Part D beneficiaries hit ‘doughnut hole'


By Jaimy Lee
Posted: September 7, 2011 - 4:00 pm ET
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The number of beneficiaries enrolled in Medicare Part D drug plans that fall into the “doughnut hole”—a coverage gap that requires enrollees who do not qualify for a low-income subsidy to pay the full cost of their drugs—has decreased from 26% in 2007 to 19% in 2009, according to a study.

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The study released by the Kaiser Family Foundation (PDF) on Wednesday looked at coverage gaps for the 29 million people enrolled in the Medicare prescription drug plan program.

“This study shows that when Medicare beneficiaries reach the gap and incur higher out-of-pocket costs for their medications, some take fewer drugs or spend less on drugs in the drug class,” the authors wrote.

In 2009, 81% of Medicare enrollees, excluding those who received the low-income subsidy, did not reach the coverage gap while 19% reached the coverage gap. Of that 19%, only 3% of the beneficiaries qualified to receive catastrophic coverage by the end of the year.

When the same beneficiaries reached the coverage gap, they filled 11% fewer prescriptions. About 71% of the Part D enrollees who reached the coverage gap in 2008 also did so the following year, mainly because of people who take medications for chronic diseases, according to the study.

The study attributes the modest declines in the number of Part D enrollees who reached the coverage gap to “increased availability of generic drugs for many chronic conditions and possibly other factors.”

Out-of-pocket costs for Part D enrollees who reach the coverage gap and do not qualify for the low-income subsidy are expected to be reduced this year. Beneficiaries who reach the gap in 2011 will pay 50% less for brand-name drugs and 7% less for generic drugs.

“As these enrollees pay a smaller share of total drug costs in the gap over time, it will be important to monitor whether the observed adverse effects on drug adherence—and potentially on health outcomes—are reduced by these changes,” the authors wrote.


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