Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Medicare Beneficiaries

04/01/2000

Sources of drug coverage for Medicare beneficiaries were unstable in the mid 1990s. In 1996, the most recent year for which data are available, an estimated 69 percent of Medicare beneficiaries had drug coverage for at least one month of the year, although only 53 percent had coverage for the entire year. Table 1-1 groups beneficiaries according to their primary source of Medicare supplemental coverage—that is, the source that assisted them with Medicare cost-sharing expenses. Not every beneficiary who had drug coverage obtained it through the same source that provided the beneficiary’s primary supplement. About 5 percent of those with drug coverage obtained it through a different source; this was most common for those whose primary supplement was an individually purchased plan.

Primary supplement With drug coverage
(000s)
Without drug coverage
(000s)
Percent without drug coverage Source of coverage for beneficiaries with drug coverage
(%)
Table 1-1. Medicare Beneficiaries with Prescription Drug Coverage for at Least One Month, by Primary Source of Medicare Supplemental Coverage, 1996
Medicare risk HMO 3,729 215 5.5% 14.5%
Medicaid 4,408 512 10.4% 17.2%
Employer Sponsored 12,045 1,535 11.3% 47.0%
Individually purchased 4,192 6,292 60.0% 16.4%
Other public sources 1,246 178 12.5% 4.9%
FFS Medicare only - 2,891 100% ---
Total 25,621 11,623 31.2% 100%\
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.

The likelihood of having drug coverage varies by different types of supplemental coverage. Only 40 percent of beneficiaries with Medigap or other individual coverage as a primary supplement had a drug benefit. On the other hand, almost 95 percent of risk HMO enrollees had some drug coverage. Almost 3 million beneficiaries had no form of supplemental coverage, whether for drugs or for other services.

Among all beneficiaries with drug coverage for at least one month in 1996, nearly half, 47 percent, were covered through an employer-sponsored retiree plan. Medicaid provided drug benefits for 17 percent of covered beneficiaries; Medigap was the primary supplement for about 16 percent of covered beneficiaries; and 14.5 percent of those with coverage were enrolled in a Medicare risk HMO. Almost 5 percent of beneficiaries with coverage obtained it through a variety of small public programs.

However, as was noted earlier, not all beneficiaries who had drug coverage had it for the entire year. Information on this issue was not collected as part of this study. The following information (see Figure 1-1) is derived from an independent analysis of 1996 MCBS data conducted by Bruce Stuart, et al. of the University of Maryland for the Commonwealth Fund.36


Figure 1-1. Duration of Prescription Drug Coverage for Medicare Beneficiaries in 1996

Figure 1-1. Duration of Prescription Drug Coverage for Medicare Beneficiaries in 1996

Note: This analysis includes only noninstitutionalized beneficiaries enrolled in Medicare for the entire year.

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


The authors’ month-to-month examination of supplemental insurance shows that prescription coverage in 1996 was often fragmented and non-continuous. Over one in four Medicare beneficiaries (about 6.3 million people) who had coverage at any time during 1996 had coverage for only part of that year. For people with part-year coverage whose period of coverage could be ascertained, the average duration of coverage was 6.6 months. Thus, while the data presented in Table 1-1 indicate that 69 percent of beneficiaries had drug coverage for at least one month in 1996, only 53 percent had coverage for the entire year.

Table 1-2 shows partial and full-year drug coverage rates by source of supplemental insurance for those Medicare beneficiaries who had drug coverage for at least one month during 1996.37 Beneficiaries with every kind of Medicare supplement experienced changes in their coverage status in 1996, but changes for some types of coverage were particularly dynamic (see Figure 1-2). Almost 48 percent of beneficiaries with drug coverage through Medigap policies and 29 percent who were enrolled in Medicare HMOs had drug coverage for only part of the year. Almost 14 percent of individuals with employer-sponsored drug coverage had part-year coverage. Individuals dually eligible for Medicare and Medicaid had the most stable coverage during the year, with only 7 percent experiencing gaps in drug coverage.38


Figure 1-2. Duration of Coverage for Beneficiaries who had Coverage in 1996, by Source of Coverage

Figure 1-2. Duration of Coverage for Beneficiaries who had Coverage in 1996, by Source of Coverage

Note: This analysis includes only noninstitutionalized beneficiaries enrolled in Medicare for the entire year.

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.

Table 1-2. Duration of Prescription Drug Coverage for Medicare Beneficiaries Who Had Coverage in 1996
Source of coverage in December 1996 Of full-year beneficiaries covered at any time in 1996, percent who had:
  Part-year coverage Full-year coverage
Total 26% 74%
Employer-sponsored 14% 86%
Individual Medigap 48% 52%
Medicaid 7% 93%
Medicaid QMB/SLMB 8% 92%
Medicare HMO 29% 71%
Other 30% 70%

Note: This analysis includes only noninstitutionalized beneficiaries enrolled in Medicare for the entire year.

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.

Drug coverage for individuals with Medigap policies was particularly tenuous. While MCBS reports that 39.8 percent of Medicare beneficiaries with Medigap or other private nongroup policies had drug coverage in 1996, that number is misleading. Compared to other categories of supplemental insurance, beneficiaries with Medigap were most likely to have drug coverage from another source and most likely to have part year coverage. About 16 percent of Medigap policyholders with drug coverage got their coverage from a secondary source, and only 25 percent had coverage for the full year. Additionally, as noted above, this category includes an unknown number of non- Medigap policies, such as private long-term care insurance or drug-only policies. There is no data on the value of the drug coverage provided under these plans. Overall, only 21 percent of Medigap or other private nongroup insurance policy holders had drug coverage from that source for the full year.

In an additional analysis, Stuart et al. analyzed drug coverage for those individuals continuously enrolled in Medicare for 1995 and 1996.39 Only 46 percent of beneficiaries had drug coverage throughout the entire two-year period. Six percent of these beneficiaries maintained coverage throughout the period by switching from one source of coverage to another at least once. While 11 percent of beneficiaries gained coverage at some point during the period, 8 percent lost coverage and 12 percent had intermittent coverage.

View full report

Preview
Download

"intro.pdf" (pdf, 23.11Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"C1.pdf" (pdf, 75.87Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"c2.pdf" (pdf, 169.02Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"c3.pdf" (pdf, 92Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"future.pdf" (pdf, 12.41Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appena.PDF" (pdf, 149.34Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appenb.pdf" (pdf, 27Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appenc.pdf" (pdf, 25.44Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®