Prescription Drug Coverage-Seniors
- Percentage of adults aged 65 and older who have a creditable prescription drug plan
Prescription Drug Coverage is the percentage of adults aged 65 and older with a creditable prescription drug plan, meaning the plan is expected to pay as much as the standard Medicare prescription drug coverage. A creditable plan must provide coverage for brand name and generic prescriptions, reasonable access to retail providers, pay on average at least 60% of participants’ prescription drug expenses, and satisfy one of several other conditions established by the Centers for Medicare & Medicaid Services (CMS). The senior ranks are based on 2012 data obtained from The Henry J. Kaiser Family Foundation’s State Health Facts.
The percentage of adults aged 65 and older with prescription drug coverage varies from 88.0% in Conneticut, Iowa, Minnesota, New York, and Ohio to 76% in Maryland. Nationally, 85% of seniors have prescription drug coverage.
In 2010, Medicare beneficiaries spent $4734 out of their own pockets for health care spending, on average, and 11% of that was spent on prescription drugs. Prescription drug coverage impacts the overall health of older adults by increasing medication adherence and decreasing financial strain. Individuals may have prescription drug coverage from Medicare Part D, a current or former employer, or individual insurance plans. Medicare Part D and private insurance plans vary in cost and coverage by state. Those without creditable prescription drug coverage face a penalty equivalent to 1% of the national average premium for each month that enrollment in a creditable plan is delayed. A plan’s creditable status must be disclosed by all insurers to beneficiaries and the Centers for Medicare & Medicaid Services. In a 2003 national survey, half of seniors without prescription drug coverage paid more than $100 per month on medications compared with 31.5% of seniors with drug coverage. Furthermore, those with prescription drug coverage reported a 10% reduction in cost-related medication inadherence. The enactment of Medicare Part D in 2003 has had a positive impact on the use of prescription medications and on cost savings for older Americans.Improving medication adherence, despite upfront increases in drug spending, results in system-wide cost savings in terms of future health care use. Medicare offers abundant resources on prescription drug coverage.
Cubanski J, Swoope C, Damico A, Neuman T. How Much Is Enough? Out-of-pocket spending among Medicare beneficiaries: A chartbook. Kaiser Family Foundation. http://kff.org/health-costs/report/how-much-is-enough-out-of-pocket-spending-among-medicare-beneficiaries-a-chartbook/. Accessed May 17, 2015.
 The Medicare prescription drug benefit fact sheet. The Henry J Kaiser Family Foundation Web site. http://kff.org/medicare/fact-sheet/the-medicare-prescription-drug-benefit-fact-sheet/. Updated November 2013. Accessed March 31, 2014.
 Safran DG, Neuman P, Schoen C, Kitchman MS, Wilson IB, Cooper B, et al. Prescription drug coverage and seniors: Findings from a 2003 national survey. Health Aff. 2005;Suppl Web Exclusives:W5-152-W5-166.
 Yin W, Basu A, Zhang JX, Tabbani A, Meltzer DO, Alexander GC. The effect of the Medicare Part D prescription benefit on drug utilization and expenditures. Ann Intern Med. 2008;148:169-177.
 Roebuck MC, Liberman JN, Gemmill-Toyama M, Brennan TA. Medication adherence leads to lower health care use and costs despite increased drug spending. Health Aff (Millwood). 2011;30(1):91-99.