In the past, Medicare seniors had to pay for all prescription drug costs out of pocket. This lack of coverage is a very heavy burden for older adults with multiple medical conditions.
To address this, in 2006, Medicare Part D began to provide some coverage for prescription drugs. However, in order to reduce the cost of Part D, it contains a coverage gap (commonly known as the “doughnut hole”) in which patients are again responsible for all prescription drugs once they reach a certain deductible and receive a certain amount of coverage fees until they reach catastrophic levels of coverage.
To address the burden of the doughnut hole on seniors, the Affordable Care Act gradually reduced the coinsurance rate in the doughnut hole for Medicare Part D beneficiaries from 100% in 2010 to 25% in 2020.
A key question is how these policy changes affect drug coverage and economic hardship.A paper by Olson et al. (2022) This question was answered using survey data from 1998, 2001, 2015 and 2021. Using this method, they found:
In 2021, 5% of older adults lack prescription drug coverage, continuing a downward trend from 32% in 1998, 29% in 2001, and 9% in 2015. In contrast, 20% of older adults reported financial distress in 2021 from purchasing prescription drugs, an increase from 19% in 1998, 31% in 2001 and 36% in 2015.Lack of prescription drug insurance, multiple daily drug use, and low annual household income for all survey years
