The program created to provide Medicare recipients with prescription drug benefits exceeded expectations during its first two years, extending pharmacy coverage to most seniors while reducing their overall spending on drugs, according to a new RAND Corporation study.
Although Medicare Part D generated confusion when it was introduced in January 2006, the program has worked well for most seniors and is comparable to other non-Medicare drug plans that cover large groups of seniors, according to the report published in the August edition of the American Journal of Managed Care.
"In the beginning there was a lot of concern about Medicare Part D, but we found convincing evidence that it has exceeded expectations and generally has been successful," said Geoffrey Joyce, the study's lead author and a senior economist at RAND, a nonprofit research organization. "Most seniors now have prescription drug coverage that allows them to buy drugs at a reasonable cost."
Researchers estimate that during its first year in 2006, Medicare Part D resulted in a 16 percent drop in out-of-pocket spending among seniors for prescription medication and a 7 percent increase in the number of prescriptions filled. The savings appears to have been concentrated among the poor and disabled.
"It appears that Medicare Part D has been particularly successful in lowering costs for the poor and the disabled, which is an important finding since initially there was concern these groups would be particularly vulnerable under a privately administered benefit," Joyce said.
Researchers from RAND Health used administrative records to examine seniors' participation in the Medicare Part D program, including how the program has affected seniors' access to medications, their use of prescription drugs and their financial risk. They also compared the 10 largest Part D plans in 2006 to seven non-Medicare drug plans often cited as examples of low-cost or generous pharmacy benefits.
After two years, about 90 percent of seniors have drug coverage at least as generous as the standard Part D benefit. Medicare recipients in most states could choose from more than 50 different Part D plans in 2008, a sign of competition among the private companies that provide the coverage.