Crossing the Doughnut Hole:
The Effects of the Medicare Drug Coverage Gap
for Patients who Require High-cost Medications
AcademyHealth Annual Research Meeting
June 29, 2009
Dominick Esposito
1, Margaret Colby
1, Daniel Ball
2,
Susan Garavaglia
3, Eric Meadows
2, Martin Marciniak
2 1Mathematica Policy Research, Inc.2 Eli Lilly and Company 3 Medco Health Solutions, Inc.
Research Objectives
●
Estimate the proportion of beneficiaries that
reach the Part D doughnut hole or catastrophic
coverage in 2007
●
Calculate the time to reach each coverage
phase from each person’s first fill
●
Identify the factors affecting the likelihood of
reaching each coverage phase
●
2007 pharmacy claims from Medco Health Solutions, Inc.
– Medicare Part D beneficiaries with cancer, osteoporosis, or rheumatoid arthritis
– Prescription drug plan (PDP) or retiree drug subsidy (RDS) • PDP—varying exposure to doughnut hole
– Standard PDP – Enhanced PDP
– Medicare Advantage PDP • RDS—no doughnut hole
●
Randomly selected a matched comparison group with other
chronic conditions
– Plan type (PDP/RDS), age, gender, geography, chronic disease score, and low-income subsidy (LIS) eligibility
Sample Characteristics: Plan Enrollment
Cancer Osteoporosis
Rheumatoid Arthritis
Other Chronic Conditions
Sample Size 31,979 325,091 5,566 362,412
Drug Plan Type
Standard PDP 4.1 3.5 5.2 3.8
Enhanced PDP 5.4 5.4 5.2 5.1
Medicare Advantage PDP 28.6 27.2 22.3 27.6
Retiree drug subsidy 62.0 63.8 67.3 63.6
Doughnut Hole Exposure
No doughnut hole 74.1 75.3 82.8 74.6
Partial doughnut hole 6.8 5.9 4.0 6.3
Standard doughnut hole 19.0 18.8 13.3 19.2
Among PDP enrollees, about 50% had the standard doughnut hole. Figures in table are percentages.Sample Characteristics: Demographics
Cancer Osteoporosis
Rheumatoid Arthritis
Other Chronic Conditions
Sample Size 31,979 325,091 5,566 362,412
LIS Eligible 7.2 6.4 10.2 6.5
Female 92.1 92.1 60.2 91.6
5 or More Chronic Conditions 42.2 37.5 44.8 37.2
Age
Under 65 4.0 2.6 20.4 3.0
65-74 44.1 37.5 52.1 38.3
75 and over 51.9 59.9 27.4 58.7
Study Design: Methods
●
Equivalent drug spending thresholds were calculated for
plans without a standard Part D doughnut hole.
●
Survival analysis
– Time until spending reached $2,400 (doughnut hole) or $5,451 (catastrophic coverage)
●
Logistic regression analysis
– Likelihood of reaching each spending threshold
– Key explanatory variables included: plan type, doughnut hole exposure, disease type, demographic characteristics
Results: Time to Reach Spending Thresholds
Cancer Osteoporosis Rheumatoid Arthritis
Other Chronic Conditions From First Fill, Average Days to
Reach:
$2,400 (Doughnut hole) 160 196 85 195
$5,451 (Catastrophic coverage) 206 245 133 254
From Doughnut Hole, Average Days
to Reach Catastrophic Coverage 107 138 73 144
Beneficiaries Reached the Doughnut Hole Spending Equivalent ~ 3 to 6.5 Months After Their First Fill
In a standard PDP design, out-of-pocket cost would reach $800 by the time a beneficiary reaches the doughnut hole, and $3,850 by catastrophic coverage.Results: Time Spent in the Doughnut Hole
0.0 0.2 0.4 0.6 0.8 1.00 30 60 90 120 150 180 210 240 270 300 330 360
E st im at ed pr obabi lit y of sp endi ng not reach ing $5, 451 ( ca tast rophi c co ve rage)
Patients Who Reach Catastrophic Coverage Spending Equivalent Spent 1 to 7 Months in the Doughnut Hole
(Estimated Survival Function)
Cancer Osteoporosis RA
Results: Odds of Reaching Spending Thresholds
$2,400 (Doughnut Hole)
$5,451
(Catastrophic Coverage) Primary Condition
Cancer 12.12** 4.08**
Osteoporosis 2.12** 1.35**
Rheumatoid arthritis 19.81** 22.40**
Other chronic conditions (reference) --
--Drug Coverage Type
Enhanced PDP 1.00 1.21**
Medicare Advantage PDP 0.72** 0.94*
Retiree Drug Subsidy 1.02 1.01
Standard PDP (reference) --
--Benefit Plan Design
Partial doughnut hole 0.96 0.54**
Doughnut hole 0.91** 0.62**
No doughnut hole (reference) --
Conclusions and Policy Implications
●
Beneficiaries with cancer, rheumatoid arthritis, or
osteoporosis may face expensive drug regimens.
– Most in this sample had spending that reached the doughnut hole.
– Differences by plan type and benefit design raise further questions.
●
Despite high out-of-pocket costs, many spend through the
doughnut hole to reach catastrophic coverage.
– By the time beneficiaries reach catastrophic coverage, they
have incurred $3,850 in out-of-pocket costs in the standard PDP. – Continued 5% cost sharing in catastrophic coverage.
