Approximately 3.4 million Part D enrollees reached the coverage gap, dubbed the "doughnut hole" in 2007, leading some to stop treatment.
The study of Part D prescription drug utilization finds that one in four (26 percent) Part D enrollees who filled any prescriptions in 2007 reached the coverage gap. This includes 22 percent who remained in the gap for the remainder of the year, and 4 percent who ultimately received catastrophic coverage.
Applying this estimate to the entire population of Part D enrollees, the analysis suggests that about 3.4 million beneficiaries (14 percent of all Part D enrollees) reached the coverage gap and faced the full cost of their prescriptions in 2007.
The analysis excludes beneficiaries who receive low-income subsidies because they do not face a gap in coverage under their Medicare drug plan.
Those taking drugs for serious chronic conditions had a substantially higher risk of a gap in coverage under their Medicare drug plan, according to the report "The Medicare Part D Coverage Gap: Costs and Consequences in 2007." Data indicate that 64 percent of enrollees taking medications for Alzheimer's disease reached the coverage gap in 2007, as did 51 percent of those taking oral anti-diabetic medications and 45 percent of patients on antidepressants.
The study found evidence of patients changing their use of prescription drugs when they are required to pay the full cost of medications in the coverage gap.
Across eight classes of drugs examined - used to treat a variety of relatively common chronic conditions - 15 percent of Part D enrollees who reached the gap stopped their drug therapy for that condition, 5 percent switched to another medication in the class, and 1 percent reduced the number of drugs they were taking in the class.
The standard Part D benefit in 2008 has a $275 deductible and 25 percent coinsurance up to an initial coverage limit of $2,510 in total drug costs, followed by a coverage gap, the so-called "doughnut hole", where enrollees pay all of their next $3,216 in drug costs. After reaching that limit, beneficiaries pay 5 percent of any additional drug costs. For 2007, these amounts were somewhat lower.
According to the report, beneficiaries who reached the coverage gap faced substantial increases in out-of-pocket spending. For example, among Part D enrollees who reached the coverage gap, but did not receive catastrophic coverage, average monthly out-of-pocket costs nearly doubled from $104 prior to the coverage gap, to $196 in the "doughnut hole."
"The Medicare drug benefit has produced tangible relief for millions of people, despite the unusual coverage gap that was created to make the benefit fit within budget constraints," Kaiser CEO and President Drew Altman said. "But if a new president and Congress consider changes to the drug benefit, it will be important to keep in mind that the coverage gap has consequences for some patients with serious health conditions."
The study analyzes retail pharmacy claims data, based on 4.5 million Medicare beneficiaries in Part D plans in 2007, the first year that most people would be enrolled in a Part D plan for a full calendar year. The analysis is based on 2007 data from IMS Health's Longitudinal Prescription Drug Database, which includes prescription drug information that represents half of all retail prescriptions filled in the United States.