Out-of-pocket burden of health care spending and the adequacy of the Medicare Part D low-income subsidy.

View Abstract

BACKGROUND

Evaluating the adequacy of Medicare prescription drug program (Part D) and its low-income subsidy (LIS) requires a comprehensive understanding of drug spending in relation to household resources.

OBJECTIVE

: To estimate out-of-pocket health care costs in the year before Part D, in context of total household spending, health status, and LIS eligibility.

RESEARCH DESIGN

Nationally representative cross-sectional study.

SUBJECTS

Two thousand two hundred thirty-one Medicare families in the 2005/2006 Health and Retirement Study.

METHODS

We assessed health care costs as a share of household resources remaining after spending on essential housing, food, personal care, and transportation. Burdensome health care costs were defined as exceeding 40% of nonessential resources. We used logistic regressions to assess the probability of incurring burdensome health expenditures, controlling for LIS eligibility.

RESULTS

In the year before Part D, more than half of Medicare families [56.0%; 95% confidence interval (CI): 55.3-59.9] experienced burdensome health care costs. Families in poor health allocated a median of 68.1% [interquartile range (IQR): 35.1-82.9] of nonessential resources to health care (compared with 34.0% median; IQR 11.9-52.2 among families in excellent health, P < 0.011). Most (64%) out-of-pocket health care spending was allocated to health insurance premiums and medications. As many as 26% of Medicare families had burdensome health care costs but were not eligible for LIS assistance.

CONCLUSIONS

Before Part D, burdensome health care expenditures were common in Medicare families. Our estimates of Part D and LIS benefits indicate a limited scope of relief.

Abbreviation
Med Care
Publication Date
2010-06-01
Volume
48
Issue
6
Page Numbers
503-9
Pubmed ID
20473197
Medium
Print
Full Title
Out-of-pocket burden of health care spending and the adequacy of the Medicare Part D low-income subsidy.
Authors
Briesacher BA, Ross-Degnan D, Wagner AK, Fouayzi H, Zhang F, Gurwitz JH, Soumerai SB