Medicare Part D After 2 Years

Published In: The American Journal of Managed Care, v. 15, no. 8, Aug. 7, 2009, p. 536-544

Posted on RAND.org on August 01, 2009

by Geoffrey F. Joyce, Dana P. Goldman, William B. Vogt, Eric Sun, Anupam B. Jena

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OBJECTIVE: To assess the broad impacts of Medicare Part D and the extent to which prior concerns have been realized. METHODS: The authors used administrative data to summarize beneficiary enrollment and plan participation in Part D, and compared pharmaceutical use and out-of-pocket spending before and after the introduction of Part D. The authors characterized the benefit designs of the 10 largest Part D plans in 2006 and compared them with the benefit designs of 7 non-Part D plans often cited as examples of low-cost or comprehensive drug benefits. RESULTS: By 2008, nearly 90% of seniors had drug coverage at least as generous as the standard Part D benefit. Excluding premiums, annual out-ofpocket spending in the 10 largest Part D plans was comparable to that of other private and public drug benefits, with the most prominent differences attributable to out-of-pocket spending on drugs not covered in the plan. Poorer beneficiaries have gained the most from Part D in terms of increased access to medications and reduced out-of-pocket spending. CONCLUSIONS: Coverage under Part D is comparable to that under non-Part D plans with respect to key features that are likely to be important to Medicare beneficiaries-access to medications and out-of-pocket costs. Nonetheless, concerns remain over drug pricing and gaps in coverage. The government should continue to monitor the competitiveness of the Part D market to ensure it meets the diverse needs of Medicare beneficiaries.

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