Skip Navigation U.S. Department of Health and Human Services www.hhs.gov
Agency for Healthcare Research Quality www.ahrq.gov
Archive print banner

Health Care Costs and Financing

This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: https://info.ahrq.gov. Let us know the nature of the problem, the Web address of what you want, and your contact information.

Please go to www.ahrq.gov for current information.

Proposed Medicare drug benefit plans with high cost-sharing and no catastrophic coverage may not help the sickest patients

Prescription drugs can be life-saving for elderly people with chronic diseases such as hypertension, yet the basic Medicare benefits package lacks drug coverage. About two-thirds of Medicare beneficiaries have supplemental drug coverage from some source, but one-third have no coverage for drugs.

A recent study shows that Medicare beneficiaries with hypertension (high blood pressure) who did not have supplemental drug coverage consistently obtained fewer prescription drugs to lower blood pressure and paid more out-of-pocket for the medications they did get. In the study supported by the Agency for Healthcare Research and Quality (National Research Service Award training grant T32 HS00020), Harvard Medical School researchers examined the influence of different types of private and public drug coverage on costs of antihypertensive medications and drug use by a 1995 national sample of Medicare beneficiaries with hypertension.

Medicare enrollees in State drug coverage programs had the highest drug use, and those in Medicare fee-for-service (FFS) plans had the lowest overall drug use. In the middle were employer-sponsored, Medicaid, and self-purchased drug coverage groups. Although they had similar illness profiles, elderly people with drug coverage through Medicare FFS plans spent on average $586 on all drugs compared with $1,094 spent by those in State programs and $1,001 by those with Medicaid drug coverage, $956 for those with employer-sponsored coverage, $836 for those with self-purchased coverage, and $672 for those with private insurance but no drug coverage.

Predictably, the Medicaid and State drug coverage groups paid much less out-of-pocket for medications (24 percent and 31 percent, respectively) than did the Medicare FFS-only group (95 percent) and the private insurance group without drug coverage (95 percent). Those with employer, State, and Medicaid drug coverage purchased a higher average number of antihypertensive tablets during the year than did those with private insurance without drug coverage or with self-purchased drug coverage. The Medicare FFS-only group purchased the fewest tablets during the year. The researchers conclude that proposed Medicare drug coverage benefit plans with high cost-sharing but no catastrophic coverage are unlikely to protect chronically ill and low-income beneficiaries from the high cost of prescription drugs.

See "Use of antihypertensive drugs by Medicare enrollees: Does type of drug coverage matter?" by Alyce S. Adams, Ph.D., Stephen B. Soumerai, Sc.D., and Dennis Ross-Degnan, Sc.D., in the January-February 2001 Health Affairs 20(1), pp. 276-286.

Return to Contents
Proceed to Next Article

The information on this page is archived and provided for reference purposes only.

 

AHRQ Advancing Excellence in Health Care