Schizophrenia Daily News Blog

Mental health patients face high Medicare Rx drug benefit costs

A new National Institute of Mental Health study reported that:

Elderly people with mental health problems who enroll into the US Medicare Part D prescription drug benefit are likely to spend as much as four times the out-of-pocket costs that are associated with private insurance, according to a new study. On average, they will reach the infamous "Donut Hole", the gap in coverage between $2,250 and $5,100 of drug costs, up to two months earlier than other categories of prescription drug beneficiaries.

The research was carried out by a partnership between the National Institute of Mental Health in Bethesda, Maryland, USA, and Thomson Medstat, an Ann Arbor, Michigan, USA-based health care business analyst.

The study, presented at the recent International Society for Pharmacoeconomics & Outcomes Research 11th Annual International Meeting, estimates the out-of-pocket costs of Medicare beneficiaries with depression, anxiety disorders and schizophrenia, using the actual claims experience of Medicare beneficiaries who are in employer-sponsored retiree plans. It also investigates the timing of the doughnut hole and examines the effects of price increases on drug utilization.

The researchers analyzed the Medstat MarketScan® databases for 1,114,009 Medicare recipients with employer-sponsored Medicare supplemental coverage for calendar year 2004 and found that out-of-pocket costs for all prescription medications would be higher for mental health patients than other Medicare beneficiaries. Specifically, patients with:

* Schizophrenia - would spend $2,453 in one calendar year under Medicare Part D, compared with $596 for patients with employer-sponsored plans; a difference of 76 percent.

* Depression - would spend $2,181 in one calendar year under Medicare Part D, compared with $694 for patients with employer-sponsored plans; a difference of 68 percent.

* Anxiety - would spend $1,884 in one calendar year under Medicare Part D, compared with $659 for patients with employer-sponsored plans; a difference of 65 percent.

A major reason for the overall higher drug costs for patients with mental illness is that their mental health problems may complicate other, physical health problems, and vice versa - requiring more medication as a result.

This phenomenon helps to drive the rapid pace at which mental health patients reach the doughnut hole in the Medicare prescription drug benefit. Half of the Medicare patients in the study would have reached the doughnut hole by August 6 of the study year, leaving them four-and-a-half months in the year during which they would have to pay additional costs out-of-pocket. Mental health patients will reach the milestone faster. Specifically, half of patients with:

* Schizophrenia - would reach the doughnut hole by June 1.
* Depression - would reach the doughnut hole by June 21.
* Anxiety - would reach the doughnut hole by July 6.

The study also analyzed the impact of out-of-pocket cost increases on prescription drug utilization, based upon the theory that patients will reduce consumption of maintenance medications by as much as 0.1 percent to 0.4 percent for every 1 percent increase in co-payments. Since patients must pay the entire cost of their medications once they reach the doughnut hole, these changes in utilization have major impacts on expenditures.

The study's lead author is Teresa B. Gibson, PhD, a director of research at Thomson Medstat. The research was conducted under a contract between Thomson Medstat and The National Institute of Mental Health in Bethesda, Maryland.

"The new Medicare drug law protects elderly patients with mental illness who would otherwise have had no coverage and face high prescription drug costs, but existing private coverage is substantially better than the standard Part D plan," said Gibson. "Employers play an important role in providing prescription drug coverage to retirees. Employers weighing a move to Medicare Part D for retiree benefits need to consider more than the initial cost savings, especially when the impacts from potentially decreased utilization are taken into account."

Source: Thomson Medstat