PDG58 CLOSING THE MEDICARE PART D COVERAGE GAP: TRENDS IN DRUG UTILIZATION AND EXPENDITURES, 2008- 2015

Abstract

Under the Affordable Care Act (ACA), the Medicare Part D coverage gap has been phasing out gradually since 2011. This study analyzes trends in prescription drug utilization and expenditures from 2008 to 2015. Data on non-disabled Part D seniors who did not receive the Low-Income Subsidy were obtained from the 2008-2015 Medicare Current Beneficiary Survey. Drug utilization was measured using the mean annual number of 30-day prescription drug fills per person. Drug expenditures were measured at two levels: mean annual total and out-of-pocket spending per person. All analyses were conducted separately for four different populations: all beneficiaries, those not reaching the coverage gap, those entering the coverage gap without reaching the catastrophic threshold, and those reaching the catastrophic threshold. Overall, the use of prescription drugs increased after the ACA, although no significant changes were among those reaching the catastrophic threshold. Total drug spending steadily increased after the ACA except for those not reaching the coverage gap; the largest increase was among those reaching the catastrophic threshold (43% increase from 2009 to 2015). However, out-of-pocket drug spending significantly decreased in the post-ACA period with the largest decrease in those not entering the coverage gap. For those reaching the catastrophic threshold, out-of-pocket spending incurred during the catastrophic coverage phase significantly increased. Despite increasing utilization and total costs of prescription drugs after the ACA, out-of-pocket drug costs significantly decreased. Our findings provide evidence the ACA’s coverage gap reform has helped to reduce financial barriers to prescription drugs for Part D beneficiaries. However, the findings of substantial increases in total drug spending over time, especially among those reaching the catastrophic threshold, may indicate a growing burden on the Medicare program. Potential changes to the Part D program and drug pricing models may be needed to reduce the growing total spending.