Presentation (CTI)

OBJECTIVES: The Medicare Part D drug program provides drug coverage for nearly 60 million Medicare beneficiaries. The coverage is administered by independent prescription drug plans, each with varying levels of drug coverage options. This study provides an analysis of beneficiary annual gross drug spending and out-of-pocket spending stratified by state, type of prescription drug plan (i.e. standalone versus Medicare Advantage), and whether beneficiaries receive low-income supplements.
METHODS: The study utilized the 20% restricted sample of Medicare 2023 data set. Medicare beneficiaries with 12-month drug coverage, use of low-income subsidies, and state of residence identified in the Medicare beneficiary summary file. Prescription drug claims for these beneficiaries were analyzed with gross drug spending and out-of-pocket spending calculated at the annual level. Type of prescription drug plan was ascertained using prescription drug contract numbers.
RESULTS: In 2023 Medicare beneficiaries with 12-months of drug coverage had on average $5,107 (s.d. 823) in annual gross drug spending and on average $379 (s.d. 80) in annual out-of-pocket spending. State level annual beneficiary spending varied significantly with Oregon having the lowest at $3,845 in annual gross drug spending and Washington DC with the highest at $7,206. Beneficiaries with low-income subsidies spent on average nearly double with annual gross drug spending at $7,717 compared to beneficiaries without low-income subsidies who spent on average $3,952. There was no significant difference in beneficiary spending based on whether they had a standalone versus Medicare Advantage drug plan; however, Medicare advantage drug plans experienced wider variation in spending an annual gross spending. There were significant differences in high- spenders defined by the 90^th percentile of spending across states and plan types.
CONCLUSIONS: Previous research suggest variation in Medicare spending is driven by use of high-cost drugs. States with above average spending should examine health system level strategies for low spending states.