3108 — Medicare Part D Increased Prescription Expenditures among Rural Residents
West AN (Veterans Rural Health Resource Center - Eastern Region)
To assess changes in medication costs for elderly VA enrollees, other veterans, and non-veterans after Medicare introduced Part D in 2006 to include coverage for prescriptions.
Medication expenditures for men 65 or older in Medical Expenditures Panel Surveys for 1996 through 2006 were CPI-adjusted to 1996 dollars. Analyses applied sample weights and survey appropriate standard errors to compare urban or rural veterans who used any VA healthcare, veterans not in VA care, or non-veterans on total annual prescription expenditures, as well as those paid by Medicare, commercial insurance or other payers, the VA, or the patient. Linear time trends were assessed with regressions using data for 1996 through 2005. The impact of Medicare Part D was assessed by comparisons of 2005 with 2006.
From 1996 through 2005, payments for non-veterans’ prescriptions by Medicare, commercial insurance and other payers, or the men themselves grew significantly (p < .01). Self-payments covered at least half of costs, with greater increases for rural than urban non-veterans. Veterans not in VA care showed less growth in prescription costs. In 2006, Medicare Part D seems to have replaced self-payments and insurance payments for urban non-veterans or veterans not in VA care, but did not induce greater prescription costs overall. However, there were sharp increases in pharmacy expenditures in 2006 for rural non-veterans (p < .05) and rural veterans who did not use VA care (p < .01). For veterans who used the VA for any healthcare, expenditures by different payers also increased significantly. VA expenditures grew fastest, though only in later years did they match the prescription payments that these veterans made themselves. Introducing Part D in 2006, however, did not significantly affect prescription expenditures for these veterans, whether urban or rural.
Rural residents tend to be sicker but have less access to healthcare than urban residents, which has been associated with greater travel burdens, lower incomes, and less insurance coverage. The sharp increase in prescription use among rural non-veterans and veterans not in VA care following the introduction of Medicare Part D may reflect pent-up healthcare demand. If so, the VA appears to be adequately meeting its rural patients’ pharmacy needs.
Medicare Part D appears to have had less impact for rural Veterans who use VA healthcare.