Riding the rollercoaster: the ups and downs in out-of-pocket spending under the standard Medicare drug benefit

This study projects how much Medicare beneficiaries who sign up for the standard Part D drug benefit in 2006 will pay in quarterly out-of-pocket payments through 2008. In the first year we estimate that about 38 percent of enrollees will hit the benefit's no-coverage zone, known as the "doughnut hole," and that 14 percent will exceed the catastrophic threshold. Because drug spending is highly persistent over time, beneficiaries who experience the biggest gaps in coverage are likely to do so year after year, with potentially serious financial consequences.     

The Impact of Sharing Drug Rebates at the Point of Sale on Out-of-Pocket Payments for Enrollees in Employer-Sponsored Insurance

ObjectivesThis study aimed to estimate the impact of sharing drug rebates at the point of sale on out-of-pocket spending by linking estimated rebates to administrative claims data for employer-sponsored insurance enrollees in 2018.MethodsWe applied the drug rebate rate to the retail price of each brand name drug fill, allocated the reductions to out-of-pocket spending based on cost-sharing provisions, and aggregated each individual’s out-of-pocket spending across drug fills. We assumed that generic drugs have no rebates for employer-sponsored insurance. We assessed the impact of sharing rebates at the point of sale on out-of-pocket spending overall, for the therapeutic classes and specific drugs with the highest average out-of-pocket spending per user, and by health plan type.ResultsAcross 4 simulations with different assumptions about the degree of cross-fill effects, we found that 10.4% to 12.2% of enrollees in our sample would have realized savings on out-of-pocket spending if rebates were shared to the point of sale. Among those with savings, approximately half would save $50 or less, and 10% would save > $500 annually. We calculated that a premium increase of $1.06 to $1.41 per member per month among the continuously enrolled, insured population would be sufficient to finance the out-of-pocket savings in our sample.ConclusionsOur study suggests that, for a small percentage of enrollees, sharing drug rebates at the point of sale would likely improve the affordability of high-priced brand name drugs, especially drugs that face significant competition.     

Does the financial protection of health insurance vary across providers? Vietnam’s experience

Using household panel data from Vietnam, this paper compares out-of-pocket health expenditures on outpatient care at a health facility between insured and uninsured patients as well as across various providers. In the random effects model, the estimated coefficient of the insurance status variable suggests that insurance reduces out-of-pocket spending by 24% for those with the compulsory and voluntary coverage and by about 15% for those with the health insurance for the poor coverage. However, the modest financial protection of the compulsory and voluntary schemes disappears once we control for time-invariant unobserved individual effects using the fixed effects model. Additional analysis of the interaction terms involving the type of insurance and health facility suggests that the overall insignificant reduction in out-of-pocket expenditures as a result of the insurance schemes masks wide variations in the reduction in out-of-pocket sending across various providers. Insurance reduces out-of-pocket expenditures more for those enrollees using district and higher level public health facilities than those using commune health centers. Compared to the uninsured patients using district hospitals, compulsory and voluntary insurance schemes reduce out-of-pocket expenditures by 40 and 32%, respectively. However, for contacts at the commune health centers, both the compulsory health scheme and the voluntary health insurance scheme schemes have little influence on out-of-pocket spending while the health insurance scheme for the poor reduces out-of-pocket spending by about 15%.     

How the new medicare drug benefit could affect vulnerable populations

This study estimates how out-of-pocket drug costs could change for vulnerable populations (racial and ethnic minorities, the near-poor, and seniors with a greater burden of chronic conditions) who qualify for the standard Medicare drug benefit. Although the new benefit might be associated with modest-to-moderate declines in out-of-pocket spending for seniors who do not qualify for subsidies, the savings might not be shared equitably and therefore might not reduce financial barriers to medication use for these populations.     

Health spending projections through 2015: changes on the horizon

Growth in national health spending is projected to slow in 2005 to 7.4 percent, from a peak of 9.1 percent in 2002. Private health insurance premiums are projected to slow to 6.6 percent in 2005, with a rebound expected in 2007. The introduction of Medicare Part D drug coverage in 2006 produces a dramatic shift in spending across payers but has little net effect on aggregate spending growth. Health spending is expected to consistently outpace gross domestic product (GDP) over the coming decade, accounting for 20 percent of GDP by 2015.     

Preexisting Condition Protections Under the Affordable Care Act: Changes in Insurance Coverage,Premium Contributions,and Out-of-Pocket Spending

ObjectivesIn January 2014, the Affordable Care Act (ACA) preexisting condition protections prohibited coverage denials, premium increases, and claim denials on the basis of preexisting conditions. This study aimed to examine changes in coverage and premiums and out-of-pocket spending after the implementation of the preexisting condition protections under the ACA.MethodsWe identified adults aged 18 to 64 years with (n = 59 041) and without preexisting conditions (n = 61 970) from the 2011-2013 and 2015-2017 Medical Expenditure Panel Survey. We used a difference-in-differences and a difference-in-difference-in-differences approach to assess the associations of preexisting condition protections and changes in insurance coverage, premium contributions, and out-of-pocket spending after the ACA. Simple and multivariable logistic or multivariable 2-part models were fitted for the full sample and stratified by family income (low ≤138% federal poverty level [FPL]; middle 139%-400% FPL; and high > 400 FPL).ResultsThe ACA increased nongroup insurance coverage to a similar extent for individuals with or without preexisting conditions at all income levels. Decreases in premium contributions were observed to a similar extent among families with nongroup private coverage regardless of declinable preexisting condition status, whereas no significant changes were observed among families with group coverage. We found greater decreases in out-of-pocket spending for individuals with preexisting conditions than those without conditions among both individuals covered by nongroup and group insurance, and a greater difference was observed among those covered by nongroup insurance (difference-in-difference-in-differences ?$279; 95% confidence interval ?$528 to ?$29).ConclusionsThe ACA protections were associated with decreases in out-of-pocket spending among adults with preexisting conditions.