Cognition and take-up of subsidized drug benefits by Medicare beneficiaries

Take-up of the Medicare Part D low-income subsidy (LIS) by eligible beneficiaries has been low despite the attractive drug coverage it offers at no cost to beneficiaries and outreach efforts by the Social Security Administration.

To examine the role of beneficiaries' cognitive abilities in explaining this puzzle.

Analysis of survey data from the nationally representative Health and Retirement Study.

Elderly Medicare beneficiaries who were likely eligible for the LIS, excluding Medicaid and Supplemental Security Income recipients who automatically receive the subsidy without applying.

Using survey assessments of overall cognition and numeracy from 2006 to 2010, we examined how cognitive abilities were associated with self-reported Part D enrollment, awareness of the LIS, and application for the LIS. We also compared out-of-pocket drug spending and premium costs between LIS-eligible beneficiaries who did and did not report receipt of the LIS. Analyses were adjusted for sociodemographic characteristics, household income and assets, health status, and presence of chronic conditions.

Compared with LIS-eligible beneficiaries in the top quartile of overall cognition, those in the bottom quartile were significantly less likely to report Part D enrollment (adjusted rate, 63.5% vs 52.0%; P = .002), LIS awareness (58.3% vs 33.3%; P = .001), and LIS application (25.5% vs 12.7%; P < .001). Lower numeracy was also associated with lower rates of Part D enrollment (P = .03) and LIS application (P = .002). Reported receipt of the LIS was associated with significantly lower annual out-of-pocket drug spending (adjusted mean difference, -$256; P = .02) and premium costs (-$273; P = .02).

Among Medicare beneficiaries likely eligible for the Part D LIS, poorer cognition and numeracy were associated with lower reported take-up. Current educational and outreach efforts encouraging LIS applications may not be sufficient for beneficiaries with limited abilities to process and respond to information. Additional policies may be needed to extend the financial protection conferred by the LIS to all eligible seniors.