Medicare Part D, introduced in January 2006, was intended to decrease beneficiaries' out-of-pocket expenditures on medications.
We examined whether this policy was successful in achieving this goal, including effects on Medicare beneficiaries without previous drug coverage and those who previously received coverage through Medicaid, in a longitudinal study of out-of-pocket expenditures on medications in 1504 Medicare beneficiaries 65 years and older participating in the 2005 and 2006 waves of the Medical Expenditure Panel Survey.
Mean annual out-of-pocket expenditures on medications decreased by 32% ($320; 95% confidence interval [CI], $250-$391), from $1011 to $691, in the year after Part D was implemented for all Medicare beneficiaries in the Medical Expenditure Panel Survey. Mean annual out-of-pocket expenditures on medications decreased by 49% ($748; 95% CI, $600-$897), from $1533 to $784, in beneficiaries without previous drug coverage who enrolled in a Part D plan. Beneficiaries who did not enroll experienced a mean reduction of 32% ($353; 95% CI, $188-$518), from $1116 to $763. Mean annual out-of-pocket expenditures on medications remained similar in dual Medicare and Medicaid beneficiaries.
The introduction of Medicare Part D was associated with reductions in Medicare beneficiaries' out-of-pocket expenditures on medications, particularly in beneficiaries without previous drug coverage, and did not substantially change expenditures for Medicare beneficiaries who previously received pharmacy coverage through Medicaid. However, a question remains about whether the high public cost of providing pharmacy coverage through Medicare is worth the substantially lower financial benefit derived by beneficiaries.