Drug Benefit Changes Under Medicare Advantage Part D: Heterogeneous Effects on Pharmaceutical Use and Expenditures

Abstract

Although Medicare Part D improved drug benefits for many beneficiaries, its impact on the coverage of Medicare Advantage Part D (MAPD) enrollees depended on their pre-existing benefits and whether they had gap coverage under Part D. To examine changes in prescription drug utilization and expenditures associated with drug benefit changes resulting from the implementation of Part D. We studied 248,773 continuously enrolled MAPD patients in eight states. Patients whose insurance product or Census block could not be identified or who had atypical benefits, low-income subsidies or Medicaid coverage were excluded. The main outcomes were changes in prescription drug days supply and expenditures from 2005 to 2006 and 2005 to 2007. We linked Census data with 2005-7 MAPD claims, encounter, enrollment, and benefits data and estimated associations of the outcomes with changes in drug benefits, controlling for 2005 comorbidities, demographics, and Census population characteristics. MAPD enrollees whose drug benefits became potentially less generous after Part D had the smallest increases in drug utilization and expenditures (e.g., drug expenditures increased by $130 between 2005 and 2006), while those who potentially gained the most from Part D experienced the largest increases ($302). The differences in benefit design changes had a stronger association with drug utilization and outcomes among patients at high risk of gap entry than among the entire sample. Although Medicare Part D unambiguously improved drug coverage for many elderly, it led to heterogeneous changes in drug benefits among MAPD enrollees, who already had generic and sometimes branded drug benefits. After 2006, benefits were worse for individuals who had branded drug coverage in 2005 but now had a coverage gap, but benefits may have improved for individuals who acquired branded drug coverage. Commensurate with these differential changes in benefits following Part D, changes in drug utilization and expenditures varied substantially as well.