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Part D Plans May Be Startled By Drug Costs for Dual Eligibles

Twelve percent of disabled dual-eligible beneficiaries had Medicaid prescription drug costs that exceeded $5,000 per person, compared with less than 4 percent of dual eligibles over age 65.

Individuals who qualify for both Medicare and Medicaid and who are disabled and under age 65 use substantially more prescription drugs generally, and more antipsychotic drugs specifically, than "dual eligibles" who are over age 65 and not disabled.

In addition, per-person Medicaid prescription drug costs varied widely from state to state, according to a study of 1999 data by Mathematica Policy Research Inc.

Average per-person Medicaid reimbursement for prescription drugs for disabled dual eligibles under age 65 was $2,143, almost 50 percent higher than the average reimbursement for those over age 65, which ranged from $1,247 to $1,447 depending on age.

Drug costs under Medicaid exceeded $5,000 per person for 12 percent of disabled individuals who are dually eligible, while less than 4 percent of those over age 65 had drug costs that high.

Drug coverage for dual eligibles shifts from the Medicaid program to the new Part D Medicare prescription drug program on January 1, 2006, under the Medicare Modernization Act of 2003. An estimated 6 million people are dually eligible—either by virtue of being over age 65 and poor, or under age 65 and poor and disabled; many individuals in the latter category have mental illness.

James Verdier, J.D., a senior fellow at Mathematica, told Psychiatric News that the data have implications for health plans providing prescription drug coverage under the Part D program.

"The most significant finding is the very substantially greater use of prescription drugs and especially of antipsychotic drugs for dual eligibles in the disabled category under age 65," Verdier said. "There is a suspicion that some of the health plans that have less experience with the Medicare and Medicaid populations may not have focused on this. Any plan that's been in the Medicaid program would not be surprised."

Verdier noted that the other significant finding is the wide variation from state to state in per-person Medicaid prescription drug costs for dual eligibles. Those costs ranged from $857 in Colorado to $2,225 in Missouri. For disabled dual eligibles who are under age 65, per-person reimbursement ranged from $1,099 in Colorado to $2,916 in Florida.

Verdier noted that the Centers for Medicare and Medicaid Services (CMS) has established 34 prescription drug plan (PDP) regions, nine of which include more than one state.

"The regions that were set up for the prescription drug plans were based on similarity with the over-65 population," he told Psychiatric News. "If it turns out that there is more variability in multistate regions among the under-65 population, then CMS may want to rethink those regional boundaries."

Mathematica's data are posted online at <www.cms.hhs.gov/researchers/projects/Medicaid_rx>. A summary is available in an "issue brief" at <www.mathematica-mpr.com/publications/pdfs/medicaiddata.pdf>.

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