Researchers recommend educational programs for patients selecting a drug plan
Annually, Medicare beneficiaries are overpaying by hundreds of dollars for their prescription benefits, an investigation by researchers reveals. This is due to the difficulty in selecting the appropriate prescription drug plan. The study, published in the October issue of Health Affairs, examines how well beneficiaries across the nation were making plan choices in the fourth year of the Medicare Part D program.
According to researchers, in 2009, only 5.2% of beneficiaries chose the least expensive Medicare prescription drug benefit (Part D) plan that satisfied their medical needs. These choices generated overspending on Part D premiums and prescription drugs by an average of $368 per year.
Lead author Chao Zhou, PhD, a postdoctoral associate at University of Pittsburgh Graduate School of Public Health said, “Educational programs that help people navigate the dozens of plans available would make it easier to select plans that best meet their health care needs without overspending.”
“In particular, government officials could recommend the three most appropriate Part D plans for each person, based on their medication history,” said coauthor Yuting Zhang, PhD, associate professor of health economics at Pitt Public Health. “Alternatively, they could assign beneficiaries to the best plan for them based on their medication needs, while offering them the option to choose another plan instead.”
Researchers analyzed data for 412,712 people, with an average age of 75. They examined the difference in a patient’s total spending, which included the plan premium and out-of-pocket payment for the prescriptions filled. Then, a comparison was made between the total spending for plan the patient chose and the cheapest alternative option in the region that would fulfill the patient’s medication needs.
The following trends emerged from the study results:
· Beneficiaries often purchase plans with more generous features, such as generic drug coverage in the coverage gap, in an effort to overprotect themselves
· With increasing age, beneficiaries increasingly chose more expensive plans. People older than 85 overspent by $30 more than people 65 to 69 years old
· Blacks, Hispanics, and Native Americans chose less expensive plans than whites
· When plan options increased in a region, the amount of overspending increased by $3.20 per additional plan available
“A previous study showed that in 2006, beneficiaries could have saved nearly 31% of their total drug spending by switching to the lowest cost plan,” Dr Zhou said. “Since our results are similar, this suggests people are not learning to reduce overspending.”