Differential Effects by Mental Health Status of Filling the Medicare Part D Coverage Gap

Objective: To study how changes in insurance benefit design affect medication use of older adults with mental disorders.
Data sources: US Medicare claims data from 2007 to 2018.
Study Design: We focus on the gradual elimination of the Medicare prescription drug coverage gap beginning in 2011, and examine the effects on medication use and out-of-pocket spending by drug type with a difference-in-difference approach. We identify subpopulations by mental disorders and compare the estimates across mental health groups and to the general population.
Principal Findings: Closing the gap substantially reduced individuals’ annual out-of-pocket spending. The reduction was larger for those with more severe disease (Alzheimer’s and dementia: -$554.7; severe mental disorders: -$435.97, common mental disorders: -$366.29; general Medicare population: -$183.87). The policy also increased branded drug utilization, with the effect for patients with AD being much smaller than the other groups (3% vs 19−20%), and decreased generic drug utilization for all groups (2−4%).
Conclusions: Patients’ responses to price changes vary across mental disorders and by drug type. The impact on branded drugs utilization among those with Alzheimer’s and dementia is particularly small. Our findings suggest that lowering medication costs has differential impacts across diseases and may not be sufficient to improve adherence for all conditions, in particular those with severe mental health disorders such as Alzheimer’s and dementia.