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Seniors Who Max Out Drug Benefits Often Quit Medicare Managed Care

WebMD Health News

April 25, 2000 -- Throw more wood on the smoldering debate over rising drug costs and the lack of a standard Medicare pharmaceutical benefit. Seniors who ran through their drug benefits were twice as likely to quit Medicare managed care plans, according to a study published in the April 26 issue of JAMA.

Indeed, rising costs are a force for seniors to reckon with. A report to be released Wednesday by the non-profit consumer health care organization Families USA indicates that prices for 50 prescription drugs commonly used by American seniors rose at nearly twice the rate of inflation between January 1999 and January 2000.

Since traditional Medicare fee-for-service does not offer outpatient drug coverage, beneficiaries may choose to join managed care plans that do. But they may later leave one plan to gain fresh drug benefits at another plan. "Many members in this study most likely had to disenroll to get additional drug benefits," writes study author Thomas Rector, PhD, a senior researcher at UnitedHealth Group's Center for Health Care Policy and Evaluation.

"Exhaustion of drug benefits had a powerful influence on the behavior of Medicare beneficiaries that may lead to discontinuity of care, including medication use," he says.

Currently, about 10% of the nation's 39 million Medicare patients have drug coverage through managed care plans. Less than 70% of beneficiaries have a plan in their area, and two-thirds of the plans offer a drug benefit.

"All of the [study] patients had competing health plans in the same market area," Rector tells WebMD. "So they could have disenrolled from our plans and gone to another health plan to continue to get drug benefits." He allows that patients also may have quit to return to traditional Medicare, where they have more selection over doctors and hospitals. "A prime reason why people enroll in managed care is to get a drug benefit," he tells WebMD. "If that reason goes away, people may be less inclined to stay enrolled."

Rector's retrospective study included more than 61,000 seniors in four United-affiliated network-model health plans. The plans' 1998 drug benefit caps ranged from $300-$1,000. The likelihood of exhausting drug benefits ranged from 17-25% among the plans, and patient disenrollment rates spanned from 6.5-19%.

Looking ahead doesn't improve the landscape. In an editorial accompanying the JAMA study, Harvard Medical School professor Joseph Newhouse, PhD, predicts that the future will bring new reductions in managed care pharmaceutical benefits that will make the plans less attractive for those seniors with the most need for drug coverage.

Though nearly two-thirds of Medicare beneficiaries have some form of drug coverage, Sager tells WebMD that Rector's study helps illuminate problems with that figure. "It turns out that many of the two-thirds who do have a drug benefit have terrible benefits that melt like snow on a spring day if you have a substantial need for prescription drugs." He backs a new drug benefit and pharmaceutical price controls.

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