Remove Barriers to Obtaining Medicare Covered Drugs

Low income racial and ethnic minority beneficiaries are adversely affected by prescription drug pricing, a problem that has a negative impact on overall Medicare program costs.  A 2011 International Journal of Health Services study estimates that the economic costs of health disparities due to race for African Americans, Asian Americans, and Latinos from 2003 thru 2006 was a little over $229 billion.[1] In a report issued in September, 2009, the Urban Institute calculated that the Medicare program would save $15.6 billion per year if health disparities were eliminated.[2] America’s ethnic and racial minorities, when faced with the high costs of drugs, often make the choice to forgo necessary drugs, a choice that could harm beneficiaries’ health and increase future Medicare costs for those beneficiaries.

Access to drugs is especially problematic when racial and ethnic minority status is coupled with lower socio-economic status.  A University of California-San Francisco study found, for example, that having a lower income makes one 15% more likely to forgo buying a prescribed drug.[3]  Similarly, language and cultural barriers impede access to affordable drugs for certain minorities and perpetuate health disparities.  For example, a 2014 Heath Affairs article highlights the inability of Medicare Part D and the Affordable Care Act (ACA) to reach Latino populations due to either poor marketing or linguistic barriers.[4]

Extent of the Problem

A 2012 Center for Disease Control and Prevention study shows that 10% of all Caucasians, 15% of non-Latino African Americans, and 13% of Latinos reported not getting necessary prescriptions filled because of costs.  Of the Latinos surveyed, Puerto Rican Americans reported not getting drugs due to cost concerns 16% of the time – the largest number reported.  Persons of Central and South American origin and Mexican-Americans reported not getting prescriptions for this reason 14% of the time.[5] Researchers at the University of California-San Francisco Department of Medicine found that 21% of minority respondents restricted their use of prescription drugs when out-of-pocket costs exceeded $100 per month.[6] A 2007 Journal of General Internal Medicine article reports that Latino, African-American, and Caucasian respondents reported that they did not take a prescribed drug due to costs 41, 40, and 28% of the time, respectively.[7] One May 2015 Health Affairs study’s findings show the existence of copayments for nonwhite patients raised the likelihood for major cardiovascular problems by 35% and raised health care spending by 70%.[8]

Possible Help with Drug Costs

While some assistance programs are not available for all beneficiaries, there are a number of programs that offer assistance with drug costs. The most direct source of help with prescription drug costs is the Part D Low Income Subsidy (LIS), also known as “Extra Help.”  The LIS not only helps with actual drug costs, it also helps with premiums and eliminates the Part D coverage gap known as the “Donut Hole.” [9] There are two ways to access the LIS.  First, individuals and couples with countable income up to 150% of FPL, and within program resource limits, may apply directly to the Social Security Administration (SSA), the agency that administers the LIS.  Second, individuals on Medicare and Medicaid (dual eligibles), or on a Medicare Savings Program, or who have Medicare and SSI, automatically qualify for the LIS and do not have to apply for it.  Program criteria are available at: https://www.cms.gov/Medicare/Eligibility-and-Enrollment/LowIncSubMedicarePresCov/index.html?redirect=/LowIncSubMedicarePresCov/01_Overview.asp (site visited January 20, 2016).

Medicare Savings Programs (QMB, SLMB and QI) help with Part A and B cost sharing and premiums to varying degrees.  Eligibility criteria for these programs can be found at https://www.medicareadvocacy.org/medicare-info/medicare-part-d/#MSPs (site visited January 20, 2016). The Medicare Savings Programs are administered at the state level, and income and resource levels vary by state.  Most states set income eligibility at 100%, 120% and 135% of Federal Poverty Level (FPL) and have varying resource limits. Some states, however, have more generous limits.  Specific eligibility information by state is available at http://www.medicare.gov/contacts/ (site visited January 20, 2016). For more information on Medicare Savings Programs in general, please see https://www.medicareadvocacy.org/medicare-info/medicare-savings-programs/ (site visited January 20, 2016).

State Pharmaceutical Assistance Programs (SPAPs) are offered in 23 states and offer assistance to the elderly and disabled who have out of pocket costs related to Medicare Part D. The National Conference of State Legislatures keeps a list of SPAPs and other state programs, and closely follows new developments in state drug coverage at http://www.ncsl.org/Default.aspx?TabId=14334#Subsidy (site visited January 20, 2016).

Conclusion

More comprehensive efforts to rein in Medicare drug costs are essential. Congress could allow Medicare to negotiate drug prices, or require drug companies to pay rebates to Medicare on behalf of individuals who are dually eligible for both Medicare and Medicaid similar to the rebates required in the Medicaid program. Other strategies could include limiting higher payments for new drugs unless they perform better than an existing drug.  Similarly, a better balance between fostering innovation and delivering substantive medical value must be sought.  Where state and federal governments have contributed to the costs of drug research, policymakers could explore imposing additional obligations on pharmaceutical companies. This approach could be used to improve access for low income racial and ethnic minority beneficiaries.