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

The objective of this study was to study how changes in insurance benefit design affect medication use of older adults with mental disorders.

US Medicare claims data from 2007 to 2018.

Exploiting the gradual elimination of the Medicare prescription drug coverage gap beginning in 2011, we examine the effects on medication use and out-of-pocket spending by drug type with a difference-in-differences approach. We identify subpopulations by mental disorder and compare the estimates across mental health groups and to the general Medicare population.

Closing the gap substantially reduced individuals' out-of-pocket spending, and the reduction was larger for those with more severe mental disorders. The policy led to a statistically significant increase in branded drugs used for the Medicare population (0.91; P<0.01; 12.12% increase), beneficiaries with severe mental disorders (2.71; P<0.01; 11.13% increase), and common mental disorders (2.63; P<0.01; 11.62% increase), whereas such effect for beneficiaries with Alzheimer disease and dementia (AD) is substantially smaller (0.44; P<0.01; 1.83% increase). In contrast, the policy decreased generic drugs used by about 3%-5% for all groups. Overall, beneficiaries without mental health illness have a statistically significant increase in total medication use (2.05%) following the coverage gap closure, while all 3 mental health groups have either no statistically significant changes or a small reduction in total mediation use (AD, -1.26%).

Patients' responses to price changes vary across mental disorders and by drug type. The impact on branded drug utilization among those with AD 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 AD.