Back to Annual Meeting

Back to Annual Meeting

APHA Scientific Session and Event Listing

Stephen D. Hooper, MBA, Health Economics Group, Inc., 1050 A University Avenue, Rochester, NY 14607, 585-241-9500, sdh_sdh1@yahoo.com and Susan L. Walsh, JD, Department of Human Resources, Monroe County, 39 West Main Street, Rochester, NY 14614.

For the 20 million non-poor individuals expected to enroll in Medicare Part D, average benefits are projected to be 50.4% of prescription drug costs. This study was based on analyses of Part D benefit design and utilization/expenditure distribution data published by CMS to facilitate actuarial determinations related to employer subsidies. Analyses show that approximately 11% of the eligible population will spend nothing on prescription drugs in 2006; 4% will spend $1 - $250; 24% $251 - $750; 48% $750 - $3,600; and 13% will exceed $3,600. About half will reach the "donut hole," where benefits drop to zero. These percentages differ from previous reports, but they are similar to 2004 data from a group of retired municipal employees in upstate New York. Actual 2004 data and CMS projections indicate that in 2006 40% of the eligible population will receive benefits greater than half of their expenditures. When the required Part D premium (typically $30 per month) is accounted for, only 13% of the eligible non-poor population will receive benefits exceeding 50% of their total expenditures. Because the Part D benefit design is skewed in favor of those who spend the most, approximately one-third of the eligible non-poor population will receive net benefits of $500 or less, and only ten percent will receive more than $2,000. Data show that the aggregate benefit cost of Medicare Part D for the non-poor population is likely to exceed prior projections, and net benefit levels will be lower than previously estimated.

Learning Objectives:

• Describe in detail the Medicare Part D benefit structure.
• Identify benefit levels to be realized by various subsets of the eligible population.
• Formulate alternative benefit designs that would be easier for the eligible population to comprehend.

Keywords: Prescription Drug Use Patterns, Federal Initiatives

Presenting author's disclosure statement:

Not Answered