Impact of the Medicare modernization act on low-income persons

Dawn E Havrda, Beth A Omundsen, William Bender, Mary Ann Kirkpatrick
Annals of Internal Medicine 2005 October 18, 143 (8): 600-8

BACKGROUND: Low-income Medicare beneficiaries without prescription benefits have high out-of-pocket medication expenses that can discourage adherence to treatment regimens. The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 created a temporary drug discount card program and a prescription benefit with low-income provisions to assist with medication expenditures for eligible seniors.

OBJECTIVE: To determine the impact of the new drug discount card and prescription benefit on medication expenditures by low-income Medicare recipients who require pharmaceutical company assistance for obtaining medications.

DESIGN: Retrospective, nonrandomized evaluation.

SETTING: Family practice physicians' office in northern Virginia.

PATIENTS: 137 Medicare recipients without prescription coverage who received assistance from pharmaceutical companies for medications.

MEASUREMENTS: Patients were stratified into 3 categories according to income, household size, and the federal poverty line (FPL), as defined by the new Medicare act. Participants' long-term oral and inhaled medications, dosages, and instructions for use were obtained. The MMA criteria for low-income provisions were applied for the drug discount program and for the prescription benefit. Medication costs under the new Medicare benefits were compared with those incurred without assistance and with the use of pharmaceutical company programs for the cohort and FPL categories.

RESULTS: In all income categories, medication costs were lower after enrollment in all programs than those of patients without assistance. Compared with pharmaceutical company assistance, Medicare drug discount cards resulted in less savings for all income groups. For the prescription benefit, persons with incomes less than 135% of FPL had the greatest benefit because of low-income subsidies. Persons ineligible for low-income subsidies receiving the standard benefit had a smaller reduction in out-of-pocket costs and variable monthly expenditures; they realized a superior savings with pharmaceutical company assistance programs.

LIMITATIONS: The generalizability of these findings is limited because the authors used a discount pharmacy to determine drug costs for persons receiving no assistance, could not determine asset criteria for the MMA drug benefit low-income subsidy, and used a selected Medicare population.

CONCLUSIONS: In a low-income Medicare population without prescription coverage, pharmaceutical company programs offered considerable savings and were superior to the Medicare drug discount cards. For the Medicare prescription plan, the greatest savings was among those eligible for low-income subsidies. Month-to-month medication costs may vary substantially for persons ineligible for such subsidies, and pharmaceutical company assistance may be a better alternative.

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