Medicare Part D beneficiaries may pay a price for poor knowledge of their Part D benefits

April 22, 2008 (Oakland, Calif.) – Medicare Beneficiaries have limited knowledge of their Medicare Part D outpatient prescription drug benefits. And those who are unaware of the coverage gap are less likely to report any cost-coping behaviors and more likely to report that the costs of drugs created a substantial financial burden, according to researchers. The study appears in the April 23/30, 2008 issue of the Journal of the American Medical Association (JAMA).

“The new Medicare Part D program provides billions of dollars in new benefits for seniors, but also imposes complex and high levels of cost-sharing. The study shows that many seniors have trouble understanding these benefits, and that this poor knowledge limits their ability to manage their medication needs and costs,” said John Hsu, MD, Director of Kaiser Permanente’s Center for Health Policy Studies and the lead investigator and author of the study. “Seniors with worse knowledge were less likely to switch to less expensive medications, and more likely to report going without basic necessities.”

The study, by investigators with Kaiser Permanente’s Center for Health Policy Studies and the Division of Research; University of California, San Francisco; and Harvard University, interviewed 1,040 Medicare Advantage Prescription Drug plan beneficiaries who had a gap in their drug coverage if they exceeded $2,250 in drug costs. In the coverage gap, also called the “doughnut hole,” these beneficiaries had to pay for the full cost of their outpatient medications.

“The Medicare drug benefit is complex, but it provides important coverage that didn't exist for many older Americans before January 2006,” said Patricia Smith, President and CEO for the Alliance of Community Health Plans. “This study tells us that more education is needed to help Medicare enrollees gain the most from the benefit, but it also tells us that Kaiser Permanente and plans like them that encourage their members to use the medications that are most effective, but least costly, are helping their patients stay healthy and at the same time find the best value in their health care coverage.”

Increased efforts are needed by Medicare and all Part D plans to offer tools to help physicians and beneficiaries choose the treatment options offering the greatest individual value, explained Hsu. “Patients need to work in partnership with their physicians to determine what works best for them -- both medically and financially.”