Impact of State Policies Supporting Medicare Part D for the Dually Eligible

Grant Description: The researchers assessed two state Medicaid policies - co-payment assistance to reduce cost sharing and beneficiary centered assignment. They examined the impact of these policies for the dually eligible population on health outcomes (health care utilization and sentinel events), beneficiary switching among plans, continuity of drug treatment, and Medicare program costs. The researchers compared beneficiaries in six states that provide full co-payment assistance to those states without such assistance. They also compared beneficiaries in Maine, the only state with CMS-approved beneficiary centered assignment for dually eligible beneficiaries, to similar beneficiaries in other states. The objective of this project was to inform the Medicare program and state policymakers on the impact of the Part D benefit on dually eligible beneficiaries.

Policy Summary: With implementation of the Medicare drug benefit in 2006, prescription drug coverage for millions of dually eligible Medicare-Medicaid beneficiaries shifted from state Medicaid programs to private Medicare Part D prescription drug plans (PDPs). Although Part D incorporates features to ensure beneficiaries access to needed drugs through Medicare PDPs, several states implemented additional policies to protect beneficiaries.  Two of these policies were: 1) eliminating drug copayments for duals (implemented initially in six states); and 2) assigning dually eligible beneficiaries to drug plans based on prior drug utilization, rather than randomly across eligible drug plans (beneficiary-centered assignment, implemented in Maine).

This study assessed the impact of these two state approaches in support of Part D on continuity of drug treatment, health care utilization and spending.  The research addressed and analyzed each independently:  

1. What is the impact of either implementing or eliminating drug copayments for dually eligible beneficiaries on drug adherence and on health outcomes and spending?

Over 80,000 dually eligible beneficiaries with diagnoses of coronary disease, high cholesterol, hypertension, diabetes, or depression were studied, using a differences-in-differences method to estimate the impact of copayment policy changes.  For all beneficiaries with one of the above disease categories (other than depression), average adherence days increased between 2005 (pre-Part D) and 2007 (post Part D) a small but significant amount.   Adjusting for demographics and health status, newly requiring copayments was associated with significantly fewer drug adherence days per year than no copayment change, and up to 25 percent lower likelihood of achieving a clinically acceptable level of adherence.  Newly eliminating copayments with Part D was associated with a significant increase in the likelihood of clinically acceptable adherence for all drug classes studied, and a trend to greater growth in drug utilization.   However, no significant effects were found on other health events (hospitalizations, emergency visits, physician visits), or Medicare spending.  

2. What is the impact of Maine’s assignment of dually eligible beneficiaries to prescription drug plans based on past prescription use on plan continuity, drug adherence, and health outcomes?

This study compared Maine beneficiaries to those in neighboring states to examine whether the Maine assignment approach was associated with differences in plan enrollment or switching, drug adherence, or other health services or outcomes.  Plan membership for non-institutional duals in Maine and New Hampshire was examined to see how Maine’s assignment approach affected patterns of enrollment and outcomes.  Additional analyses examined whether Maine beneficiaries had improved drug adherence, or lower subsequent use of health services compared to New Hampshire and other New England states.  

Beneficiary centered assignment in Maine resulted in a non-random enrollment into plans, based on clinical factors, with a larger proportion of Maine beneficiaries remaining in the plan in which they were enrolled than in a comparison state.   In Maine, more beneficiaries were switched into zero premium plans by January 2007, meaning less economic hardship, as they did not passively remain in plans that began requiring premiums.  However, there was no evidence that beneficiary-centered assignment other health services use, or improved drug adherence for two conditions studied, diabetes and high cholesterol.  This may be due to the wide variation in baseline state prescription drug and other medical services utilization, even after adjusting for health status and other factors. 

While prescription drug utilization among duals varies across states due to eligibility and program design and features, even small copayments may be significantly associated with adherence in this population.  Maine beneficiary-centered assignment clearly resulted in assignment of individuals to PDPs on clinical factors, regardless of similarities across plans’ formularies at the therapeutic class level, and greater stability in enrollment.   Such state-level policies for the dually eligible can improve drug adherence, patient experience, and lower beneficiary out-of pocket-spending.