Not surprisingly, as health status worsens, beneficiaries use more drugs. However, Table 2-7 and Figure 2-7 show that while utilization rises, a gap remains between beneficiaries with and without coverage. Within each health status category, beneficiaries with coverage are more likely to fill at least one prescription, and fill more prescriptions when they do use drugs. Beneficiaries without coverage who are in fair or poor health are as likely to fill no prescriptions as covered beneficiaries in very good health.
| % filling at least one prescription | Number of prescriptions filled by users | ||||
|---|---|---|---|---|---|
| Covered | Not covered | Covered | Not covered | Ratio, covered/ not covered | |
| Excellent | 80% | 67% | 13.76 | 11.42 | 1.20 |
| Very Good | 86% | 79% | 17.18 | 15.45 | 1.11 |
| Good | 92% | 84% | 22.40 | 20.36 | 1.10 |
| Fair | 96% | 86% | 33.22 | 26.44 | 1.26 |
| Poor | 96% | 86% | 39.67 | 31.43 | 1.26 |
| Source: Information and Methods Group, Office of Strategic Planning, Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)): Medicare Current Beneficiary Survey Cost and Use File, 1996. | |||||
Figure 2-7. Percentage of Medicare Beneficiaries with and without Drug Coverage Filling at Least One Prescription, by Health Status, 1996
Source: Information and Methods Group, Office of Strategic Planning, Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)): Medicare Current Beneficiary Survey Cost and Use File, 1996.
Table 2-8 and Figure 2-8 show that spending follows the utilization pattern: as Medicare beneficiaries report poorer health, their spending on prescription drugs increases. Again, within each health status category, beneficiaries with drug coverage have higher spending than the noncovered. Spending for beneficiaries in poor health who had drug coverage was $590 more than for those who lacked coverage; for beneficiaries with fair health, the difference was $480. Beneficiaries spent nearly twice as much out of pocket as those who had coverage unless they were in excellent health.
| Covered | Not Covered | Ratio, Covered/Not Covered | ||||
|---|---|---|---|---|---|---|
| Self-reported health status | Average total spending | Average out-of-pocket spending | Out-of-pocket as % of total spending | Average total spending (all out-of-pocket) | Average total spending | Average out-of-pocket spending |
| Total | $769 | $253 | 33% | $463 | 1.66 | 0.55 |
| Excellent | $414 | $141 | 34% | $207 | 2.01 | 0.68 |
| Very Good | $554 | $190 | 34% | $382 | 1.45 | 0.50 |
| Good | $759 | $256 | 34% | $497 | 1.53 | 0.51 |
| Fair | $1,120 | $350 | 31% | $640 | 1.75 | 0.55 |
| Poor | $1,340 | $423 | 32% | $749 | 1.79 | 0.56 |
| Source: Information and Methods Group, Office of Strategic Planning, Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)): Medicare Current Beneficiary Survey Cost and Use File, 1996. | ||||||
Figure 2-8. Out-of-pocket and Insurer Spending for Medicare Beneficiaries with and without Drug Coverage, by Health Status, 1996
Source: Information and Methods Group, Office of Strategic Planning, Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)): Medicare Current Beneficiary Survey Cost and Use File, 1996.
Table 2-9 shows that the same patterns are reinforced when beneficiaries are split according to the duration of their drug coverage. Beneficiaries who always had drug coverage had nearly twice the spending of beneficiaries who never had drug coverage at any time during the year, regardless of health status. Those in fair or poor health who were covered for only part of the year had total spending slightly closer to those who never had coverage.
| Always Covered | Sometimes Covered | Never Covered | |||||
|---|---|---|---|---|---|---|---|
| Self-reported health status | Average total spending | Average out-of-pocket spending | Out-of-pocket as % of total spending | Average total spending | Average out-of-pocket spending | Out-of-pocket as % of total spending | Average total spending (all out-of-pocket) |
| Total | $828 | $219 | 26% | $626 | $358 | 57% | $468 |
| Excellent/Good | $655 | $184 | 28% | $480 | $282 | 59% | $386 |
| Fair/Poor | $1,327 | $318 | 24% | $1,003 | $552 | 55% | $732 |
|
Source: Bruce Stuart, Dennis Shea, and Becky Briesacher, “Prescription Drug Costs for Medicare Beneficiaries: Coverage and Health Status Matter,” New York, Commonwealth Fund Issue Brief, January 2000. |
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That spending and utilization differences persist across different health statuses suggests that the overall difference in spending for covered and noncovered people cannot simply be attributed to different levels of need for prescription drugs between those with and without drug coverage. However, self-reported health status is not necessarily a good indicator of relative need for drugs or other health services. Table 2-10 uses three other indicators to compare spending by covered and noncovered Medicare beneficiaries: number of chronic conditions, number of functional limitations, and use of inpatient services during the year.
| Covered | Not covered | Ratio, covered/not covered | ||||
|---|---|---|---|---|---|---|
| Average total spending | Average out-of-pocket Spending | Out-of-pocket as % of total spending | Average total spending (all out-of-pocket) | Average total spending | Average Out-of-pocket Spending | |
| Total | $769 | $253 | 33% | $463 | 1.66 | 0.55 |
| Chronic Conditions | ||||||
| 0 | $222 | $83 | 37% | $148 | 1.50 | 0.56 |
| 1-2 | $600 | $191 | 32% | $342 | 1.76 | 0.56 |
| 3-4 | $932 | $325 | 35% | $617 | 1.51 | 0.53 |
| 5+ | $1,401 | $412 | 29% | $944 | 1.48 | 0.44 |
| Functional status | ||||||
| No Limitations | $662 | $218 | 33% | $415 | 1.60 | 0.53 |
| IADL Only1 | $1,160 | $394 | 34% | $666 | 1.74 | 0.59 |
| 1 or 2 ADLs2 | $1,051 | $348 | 33% | $582 | 1.80 | 0.60 |
| 3+ ADLs2 | $1,190 | $378 | 32% | $674 | 1.77 | 0.56 |
| Inpatient use | ||||||
| No admission | $699 | $230 | 33% | $412 | 1.70 | 0.56 |
| Admission | $1,097 | $361 | 33% | $694 | 1.58 | 0.52 |
| 1 Beneficiaries who need assistance with one or more instrumental activities of daily living, such as meal preparation or managing money.
2Beneficiaries who need assistance with activities of daily living, such as bathing, dressing, toileting, or eating. Source: Information and Methods Group, Office of Strategic Planning, Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)): Medicare Current Beneficiary Survey Cost and Use File, 1996. |
||||||
On all three measures, the pattern is the same as for self-reported health status. Beneficiaries who report more chronic conditions, worse functional status, or a hospital stay during the year spend more on drugs whether or not they have coverage. In each category, beneficiaries with drug coverage spend much more than uncovered beneficiaries in the same category; at the same time, their out-of-pocket spending is much lower.
Because spending rises so dramatically with worsening health status, the dollar gaps between the covered and the noncovered rise with poorer health. For example, among beneficiaries with five or more chronic conditions, those with coverage had average total spending $457 higher than that for beneficiaries without coverage, while the difference for beneficiaries with no chronic conditions was only $74. Out of pocket spending for uncovered beneficiaries with five or more chronic conditions was $532 higher than for those with coverage. Drug insurance clearly makes an important difference for people with severe health problems.
Table 2-11 provides MEPS data for the total population (including people with and without Medicare) by self-reported health status. The figures include only people who used any prescription drugs. Again, spending rises with poorer health status for both the covered and the noncovered population,11 and the dollar difference in spending is greatest for those in poor health.12
| Covered | Not covered | Ratio, covered/not covered | ||||
|---|---|---|---|---|---|---|
| Average number of prescriptions | Average annual spending | Average number of prescriptions | Average annual spending | Average number of prescriptions | Average annual spending | |
| TOTAL | 12.59 | $427.75 | 8.77 | $269.04 | 1.43 | 1.59 |
| Excellent | 6.00 | $175.75 | 4.34 | $144.38 | 1.38 | 1.22 |
| Very good | 10.22 | $339.21 | 7.66 | $220.50 | 1.33 | 1.54 |
| Good | 14.59 | $528.28 | 8.09 | $221.31 | 1.80 | 2.39 |
| Fair | 25.11 | $875.10 | 16.80 | $584.61 | 1.49 | 1.50 |
| Poor | 37.86 | $1,309.97 | 25.80 | $793.25 | 1.47 | 1.65 |
| Source: Center for Cost and Financing Studies, Agency for Healthcare Research and Quality: Medical Expenditure Panel Survey Household Component, 1996. | ||||||
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