The Impact of Medicare Part D on the Proportion of Out-of-Pocket Prescription Drug Costs Among Older Adults With Diabetes

Abstract

Objective: The purpose of this study was to evaluate the impact of Medicare Part D on reducing the financial burden of prescription drugs in older adults with diabetes.

Research design and methods: Using Medical Expenditure Panel Survey data (2000-2011), interrupted time series and difference-in-difference analyses were used to examine out-of-pocket costs for prescription drugs in 4,664 Medicare beneficiaries (≥65 years of age) compared with 2,938 younger, non-Medicare adults (50-60 years) with diabetes and to estimate the causal effects of Medicare Part D.

Results: Part D enrollment of Medicare beneficiaries with diabetes gradually increased from 45.7% (2006) to 52.4% (2011). Compared with years 2000-2005, out-of-pocket pharmacy costs decreased by 13.5% (SE 2.1) for all Medicare beneficiaries with diabetes following Part D implementation; on average, Part D beneficiaries had 5.3% (0.8) lower costs compared with those without Part D. Compared with a younger group with diabetes, out-of-pocket pharmacy costs decreased by 19.4% (1.7) for Medicare beneficiaries after Part D. Part D beneficiaries with diabetes who experienced the coverage gap decreased from 60.1% (2006) to 40.9% (2011) over this period.

Conclusions: These findings demonstrate that although Medicare Part D has been effective in reducing the out-of-pocket cost burden of prescription drugs, approximately two out of five Part D beneficiaries with diabetes experienced the coverage gap in 2011. Future research is needed to examine the impact of Affordable Care Act provisions to close the coverage gap on the cost burden of prescription drugs for Medicare beneficiaries with diabetes.