Back to Annual Meeting Page		American Public Health Association 133rd Annual Meeting & Exposition December 10-14, 2005 Philadelphia, PA

Abstract #105622

Boyd H. Gilman, PhD, Division for Health Services and Social Policy Research, Health Economics and Financing, RTI International, 411 Waverly Oaks Rd., Ste. 330, Waltham, MA 02452, 781-788-8100, bgilman@rti.org and John Kautter, RTI International, Division for Health Services and Social Policy Research, Health Economics and Financing, 411 Waverley Oaks Road, Suite 330, Waltham, MA 02452.

Medicare beneficiaries face a range of tiered copayment options under the Medicare drug benefit. Tiered copayments are designed to limit plan exposure, curtail excessive use of medications, and encourage use of generic alternatives without sacrificing the benefits of drug therapies. This study assesses the impact of tiered copayments for Medicare retirees with employer-sponsored drug coverage on use of prescription medications, substitution of generic for brand named drugs, enrollee out-of-pocket spending, and plan financial risk. The effects of tiered copayments for beneficiaries with chronic conditions are evaluated separately. The study uses data from the MarketScan Medicare Supplemental and Benefit Plan Design Databases. Pharmacy claims for one million retirees were merged with drug benefit design information for over 50 employer-sponsored health plans. Regression analyses were used to assess the impact of copayment tiers on the probability of filling a prescription; the proportion of prescriptions dedicated to single source and multisource brand named drugs and generic drugs; annual plan payments; and annual enrollee out-of-pocket spending. Models were estimated over all enrollees and enrollees with acute and chronic conditions separately. Enrollees in 2-tiered and 3-tiered plans were less likely to fill a prescription than those in 1-tiered plans, while beneficiaries in coinsurance plans were less likely to submit a pharmacy claim than enrollees in copayment plans. Number of prescriptions filled and proportion of brand named drugs used were negatively correlated with the number of tiers. Mean plan payments were $250 less for 2-tiered plans and $639 less for 3-tiered plans compared with 1-tiered plans. Average payments among coinsurance plans were $580 lower than 1-tiered plans. Conversely, enrollee out-of-pocket spending was positively correlated with number of tiers. Enrollee copayments were $238 higher for those in 3-tiered plans compared with those in single tiered plans. All results were highly significant. While, beneficiaries with chronic conditions were more price sensitive than those with chronic conditions, the differences were not significant. Multi-tiered copayments limit the likelihood of submitting a pharmacy claim and the number of claims submitted, and increase the likelihood of using generic substitutes. Higher enrollee copayments reduce plan financial risk, but increase beneficiary out-of-pocket spending. While copayment tiers are effective for limiting plan exposure and encouraging use of generic alternatives, the impact of benefit design on health outcomes, particularly among beneficiaries with chronic conditions reliant on medications to manage their disease and maintain health, should be considered carefully when developing cost containment policies.

Learning Objectives: At the conclusion of the session, the participant (learner) in this session will

(
• understand the definition and purpose of tiered copayments and other cost containment policies in prescription drug plans; (
• evaluate the impact of tiered copayments and other cost containment policies on access to prescription medications; and (
• advocate more effectively for cost containment policies that do not adversely affect access to prescription drugs among the elderly, the poor, and those with chronic conditions who rely on maintenance medications.

Keywords: Prescription Drug Use Patterns, Financing

Presenting author's disclosure statement:

I wish to disclose that I have NO financial interests or other relationship with the manufactures of commercial products, suppliers of commercial services or commercial supporters.

Recorded presentation