Press Release

WASHINGTON, D.C. (August 19, 2008)—Newly available Medicaid data on prescription drug use by Medicare-Medicaid dual eligibles, prepared by Mathematica Policy Research, Inc., for the Centers for Medicare & Medicaid Services, highlight issues that Medicare Part D health plans must face in dealing with the costs and care needs of dual eligibles.

Medicare assumed responsibility for drug coverage for dual eligibles in 2006 under the new Part D program. A new Mathematica^® issue brief highlights several key issues for Part D health plans, based on analysis of 2003 Medicaid data:

• Drug use by disabled dual eligibles under age 65 (35 percent of all duals) is much higher than that for elderly duals age 65 and over, with average annual costs for under-65 duals averaging $3,478 compared to $2,237 for over-65 duals in 2003.
• Under-65 duals are very heavy users of antipsychotic drugs, with 39 percent using an antipsychotic in 2003, compared to 17 percent of those over 65.
• Drug costs for dual eligibles in nursing facilities were $4 billion in 2003, almost 21 percent of all dual eligible drug costs in that year.
• In 2003, over half of dual eligibles (53 percent) used drugs paid for by Medicaid that were subsequently excluded by statute from Part D coverage (benzodiazepines, barbiturates, over-the-counter drugs, vitamins and minerals, cough and cold medications, and several other categories). These drugs are generally not costly, and Medicaid continues to cover most of them for dual eligibles. However, requiring dual eligibles to get most of their drugs from Part D plans and these excluded drugs from Medicaid can be confusing for both beneficiaries and prescribers. Under just-passed legislation, Medicare will begin to cover benzodiazepines and barbiturates under Part D, but not until 2013.

CMS data on Part D drug use and costs for 2006 should be available later this year, permitting comparisons of drug use by dual eligibles under Medicaid before 2006 and under Part D from 2006 on. 

The brief, “Medicaid Prescription Drug Use by Dual Eligibles: Issues for Medicare Part D,” by James Verdier, Ann Bagchi, and Dominick Esposito, is available at www.mathematica-mpr.com/publications/redirect_pubsdb.asp?strSite=pdfs/medicaidprescript.pdf.

Mathematica, a nonpartisan research firm, conducts high quality, objective policy research and surveys to improve public well-being. Its clients include federal and state governments, foundations, and private-sector and international organizations. The employee-owned company, with offices in Princeton, N.J., Washington, D.C., Cambridge, Mass., and Ann Arbor, Mich., has conducted some of the most important studies of health care, education, welfare, employment, nutrition, and early childhood policies and programs in the U.S.