The Impact of Medicare Part D on Out-of-Pocket Costs for Prescription Drugs, Medication Utilization, Health Resource Utilization, and Preference-Based Health Utility

Some 43 million Medicare beneficiaries received outpatient prescription drug benefits beginning January 1, 2006, with the initiation of Medicare Part D.

Researchers of this study explored whether Part D eligibility was associated with changes to beneficiaries’ out-of-pocket costs, number of prescription drugs taken, and use of emergency departments and hospitals. They compared data from the Medical Expenditure Panel Survey of people over age 65 to a control group of people not yet part of Medicare, near-elderly ages 55 to 63 years old.

After adjusting for sociodemographic characteristics and health status, compared to the near-elderly group, they found that Medicare Part D beneficiaries had a $179.86 reduction in out-of-pocket costs and a 2.05 increase in the number of prescriptions between 2005 and 2006. There was no significant change in emergency department use, hospitalizations, or preference-based health utility that would suggest a cost offset.

"These findings are important because of the scope of Part D," the researchers write, "as well as the uncertainty as to whether documented changes in medication utilization and out-of-pocket costs have led to measurable changes in Medicare beneficiaries’ nonprescription health care utilization or outcomes."