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Medicare beneficiaries likely to drop medications if they fall in the 'donut hole,' study says
By Insure.com staff

Medicare drug plan beneficiaries who fall in the insurance coverage gap known as the "donut hole" are more likely to stop taking their medication than switch to less-expensive or generic drugs, according to a study published Aug. 16 in PLoS Medicine.

Beneficiaries encounter the so-called donut hole when their drug costs exceed their annual coverage limit under Medicare Part D insurance.

Previously, beneficiaries had to pay the full costs of their drugs when they hit the donut hole, but now under health reform they get a 50 percent discount on the drugs. The discount will increase until the donut hole is fully closed in 2020.

The study by researchers from Harvard University, Brigham and Women's Hospital and CVS Caremark examined prescription drug use among more than 660,000 Medicare beneficiaries enrolled in more than 200 Medicare Part D and retiree drug plans in 2006 and 2007.

Their research found beneficiaries who encountered the coverage gap were twice as likely to discontinue their medications altogether than switch to cheaper alternatives. Proponents of the coverage gap argue it makes beneficiaries more sensitive to medication costs, which helps save money for the health care system. However, the discontinuation of recommended medication can lead to health complications.

"The resulting decrease in medication adherence could ultimately result in higher medical costs as a result of adverse health events," said lead author Jennifer M. Polinski of the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Women's Hospital and Harvard Medical School.

The research team said about one-third of the beneficiaries it tracked reached the donut hole seven months into the fiscal year. Other studies estimate between 11 and 14 percent of Part D enrollees who do not receive a low-income subsidy reach the donut hole each year.

"The Affordable Care Act incrementally eliminates the donut hole by 2020, but until that time program beneficiaries remain at risk of decreased drug utilization because of high out-of-pocket drug costs," Troyen A. Brennan, executive vice president and chief medical officer of CVS Caremark, said in a prepared statement. "A strategy that promotes the use of low-cost medications and that keeps people adherent would result in better health outcomes and overall reduced health care costs."

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