Prescription Coverage Caps Leave Elderly Scrambling for Needed Meds

Study of the effect of prescription benefit caps on Medicare HMO enrollees

During 1999 and 2000, Brenda Motheral, PhD, and researchers at the University of Arizona Health Sciences Center examined the impact that a cap (or limit) on prescription drug benefits has on the drug-taking behavior of beneficiaries ages 65 or older who are enrolled in Medicare HMO plans.

In addition, they examined the effect that reaching the cap has on disenrollment from the HMO plan.

The project was part of the Robert Wood Johnson Foundation (RWJF) Changes in Health Care Financing and Organization (HCFO) national program.

Key Findings

  • Exhaustion of prescription benefits (i.e., reaching the cap) was associated with a greater risk of a disruption in claim activity and a two-to-threefold increase in the risk of the patient disenrolling from the plan.

  • In one plan that increased its cap and moved from quarterly to quarterly rolling cap administration, 21 percent of disenrollees re-enrolled the next year.

  • In 1998, when all five plans had a $1,000 annual cap, the percent of continuously eligible members exhausting their cap ranged from four percent to 20 percent.

  • After their drug coverage was exhausted, more than 80 percent of beneficiaries continued to use their prescription card in the months after the benefit was exhausted.

    While those who had exhausted their prescription drug benefits were significantly more likely to decrease their claim activity than those who had not exhausted their benefits, the extent to which this means these individuals are not taking their medications is not clear.

  • For most enrollees, the number of days without coverage was not affected by whether cap administration was quarterly rolling or annual.