December 3, 2021 – While Senate Democrats debate the Build Back Act Better, which includes measures that reduce prescription drug costs for consumers, a new Urban Institute study find that 12.8 million adults are delayed in getting prescription medication or do not need it because of cost.
The people who procrastinated or went without this prescription drug included 2.3 million elderly people Medicare beneficiaries, 3.8 million non-elderly adults with private insurance, 1.1 million Medicaid recipients, and 4.1 million adults who were uninsured at any point in the previous year.
The nationally representative data comes from 2018-2019, before the start of the COVID-19 pandemic. The Urban Institute’s researchers used information from the Medical Expenditure Panel Survey conducted by the Agency for Healthcare Research and Quality.
According to the study, about 1 in 10 uninsured adults (9.5%) or part of the year (11.6%) had unmet prescription drug needs all year (11.6%), compared with 4.9% of Medicare enrollments, 3% of non-elderly privately insured adults and 5.6% of non-elderly adults with Medicaid.
Among Medicare beneficiaries and privately insured adults, unmet prescription drug needs were most common among women, low-income people, and people with multiple chronic conditions. More than 6 million adults with Medicare or private insurance have been delayed due to the cost of getting the necessary medication or have gone without them.
Nearly all Medicare members and 82% of privately insured non-elderly adults with unmet drug needs had one or more chronic conditions, such as e.g. high blood pressure, high cholesterol, stroke, diabetes, arthritis and respiratory diseases. The study points out that when people are diagnosed with such conditions and are unable to get the drugs they need, they are likely to have poor outcomes.
A greater proportion of Medicare members with multiple chronic conditions (5.6%) struggled to pay for their prescription drugs than those with no conditions (1.5%) or only one condition (1.7%), the study found. Of non-elderly adults with private insurance, 5.4% with multiple conditions reported that they could not afford their drugs, compared to 1.5% who had no conditions and 2.3% who had one condition.
Drug costs and ability to pay
In general, prescription drugs accounted for up to 14% of national health spending during the study period, the study said. In contrast, medication accounted for nearly 22% of the cost for Medicare members and about 17% of the cost for privately insured people.
Like spending on other types of health care, out-of-pocket spending on prescription drugs is highly concentrated among certain groups of people. Of privately insured non-elderly adults, 5.3% spent more than 1% of their family income on prescription drugs; 6.1% reported out-of-pocket spending above $ 500; 2.3%, more than $ 1,000; and 0.8%, more than $ 2,000.
Out-of-pocket spending on prescription drugs exceeded 1% of household income among 25.4% of Medicare beneficiaries, and 3.4% spent more than 10% of their household income on drugs. Personal spending on drugs exceeded $ 500 for 21.5% of this cohort; 8.9% of Medicare members spent more than $ 1,000; and 2.7%, more than $ 2,000.
More than 7% of Medicare beneficiaries with unmet prescription drug needs reported spending more than $ 2,000. Only 2.3% of privately insured non-elderly adults with unmet drug needs reported the same.
The Build Back Better Act would have a big impact
The 1.3 million Medicare beneficiaries who have spent the most on prescription drugs will be directly affected by the Build Back Better Act, which limits the cost of prescribing drugs to Medicare members to $ 2,000.
The report stated, among other things, that the law:
- Allow Medicare to negotiate prices for certain expensive medicines covered by Part B and D
- Limit beneficiary cost sharing for insulin up to $ 35 per month for people with Medicare and commercial plans.
- Lower co-insurance in Part D’s initial phase from 25% to 23%
- Establish mandatory rebates for Medicare covered by Medicare with prices rising faster than inflation
- Increase incentives for Part D to negotiate lower prices with manufacturers
What’s more, the adoption of the Build Back Better Act would make health insurance affordable for more of the uninsured, including people living in states that have chosen not to expand Medicaid among the Affordable Care Act, notes the study. Extending the coverage will make it easier for currently uninsured people to afford the prescription medicine they need.