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Anticipating Part D Phase Changes: How Heart Failure Patients Respond to the Medicare Drug Benefit Design

Bruce Stuart, F Ellen Loh, Laurence Magder, Thomas Shaffer, Jinhee Park and Christopher Zacker

Background: Much has been written about the impact of the Part D coverage gap on prescription filling behavior of Medicare beneficiaries with cardiovascular disease. However, we do not know if beneficiaries anticipating gap entry also cut spending in order to delay or avoid being in the gap. Methods and Results: We tracked 16,272 pairs of Part D enrollees with heart failure from 2006 through 2008 (half with full cost-sharing and half low-income subsidy recipients) matched on characteristics predictive of future drug spending. We estimated differences between the groups in drug spending, probability of reaching the gap and catastrophic thresholds, and December/January differences in spending. The highest drug spenders (>$600 per month) were least affected by phase transitions. Among lower spenders, 2.8% to 3.8% (p<0.05) avoided the gap through anticipatory cutbacks in 2007, rising to 6.1% to 7.7% (p<0.05) in 2008. Total reductions in drug spending attributable to Part D design features were 4.4% to 8.7% in 2007 and 11.8 to 17.1% in 2008 (p<0.05). Beneficiaries deflected part of the gap impact by shifting prescription fills from December 2007 to January 2008. The Part D design had little effect on heart failure medication spending. Conclusions: Filling the Part D coverage gap under provisions of the Affordable Care Act will provide economic benefits to most heart failure patients with mid- to high-level drug spending, but the biggest effect on drug utilization is likely among beneficiaries who anticipated entry into the coverage gap under the original benefit design.