Medicare Part D - Sophie's choice vs Hobson's choice

A study released today by WoltersKluwer Health, a global provider of drug and medical information services and content to the healthcare and pharmaceutical industries, projects that by year's end, 35 percent of all Medicare Part D enrollees or approximately six million people will have entered the "doughnut hole," a nearly $3,000 coverage gap inherent to the new Medicare drug prescription plan.

By the end of this month alone, a total of four million Medicare-eligible seniors and disabled, averaging seven prescriptions per month, are estimated to enter the gap. According to the new data, those who fell into the doughnut hole this year chose to discontinue therapy 16 percent of the time across all non-acute therapeutic categories.

Some discontinuance rates were considerably higher, for example, the anti-arthritics category saw a 33.4 percent drop in usage. The findings also indicate a 4 percent increase in brand utilization across all non-acute therapies during the period January-August 2006.

"Faced with a coverage gap, patients tend to remain loyal to ther therapies that they believe to be most beneficial," said Chris Messner, Product Management Director of Wolters Kluwer Health's Pharma Solutions business unit.

"Rather than switching from branded therapies to generics as a means of cutting costs, the data indicates a significant number of seniors are taking prescription decisions into their own hands and dropping therapies altogether."

Jonathon Gruber, PhD, Professor of Economics, Massachusetts Institute of Technology noted that, "these facts are worrisome, as it appears these behavior changes could cause higher health costs as a result of increased hospitalization rates."

According to the 2006 Medicare Part D plan, standard enrollees pay thefirst $250 of medications. After reaching that initial deductible, 75 percent of their drug costs are covered.

However, once total annual drug costs exceed $2,250, the enrollee must pay the full cost out-of-pocket until costs surpass $5,100, the level when catastrophic coverage begins.

This $2,850 gap in coverage is known as the "doughnut hole".