Exploring the Frequency That Beneficiaries Encounter Subsidy Losses Attributed to Medicare Part D’s Low-Income Subsidy Program
Cohort study dives into whether low income subsidy losses are associated with disability status, age, and race and ethnicity.
If participants qualify for the low-income subsidy (LIS) program, Medicare Part D’s prescription drug program—powered by the Social Security Administration (SSA) and the Centers for Medicare & Medicaid Services (CMS)—offers them cost-sharing and premium assistance on an annual basis. Last year alone, more than one-quarter of Part D enrollees (27%) were able to receive either partial or full LIS benefits, representing 13.4 million individuals.
A loss of Medicare Part D LIS benefits could result in a rise in out-of-pocket (OOP) drug costs. Because there is a correlation between drug prices and medication adherence, it might come as no surprise that higher costs could cause a reduction in adherence to medications, including those that threat chronic illnesses, such as cardiometabolic diseases and mental health conditions, along with adverse health outcomes.
Using Medicare data from 2007-2018 for a 50% sample of beneficiaries who received Part D LIS benefits during the study period and had continuous Medicare A and B enrollment for 12 months in a given year, a cohort study published in JAMA Health Forum aimed to determine how often beneficiaries faced subsidy losses attributed to the LIS program, while exploring the chance of subsidy loss by disability status, age, and race and ethnicity.1 The study authors also sought to dive into the association of subsidy loss with changes in prescription drug OOP costs and use, comprised of four chronic drug classes.
Enrollment data consisted of monthly enrollment in Medicare Parts A, B, D, and Medicare Advantage, and dual eligibility for Medicare and Medicaid, along with Part D LIS status. Part D event data include prescription drug fills covered by stand-alone prescription drug plans and Medicare Advantage prescription drug plans.
To measure changes in subsidy status that occurs year to year, the investigators found people who received the full LIS in December of each year (2007-2017), along with subsidy changes that happened at the beginning of the following year. When it came to deemed beneficiaries, data for patients with full and partial benefit dual eligibility were separately assessed.
For those whose subsidies were not renewed automatically, the authors divided subsidy losses into four categories:
- Temporary losses
- Extended losses
- Subsidy reductions
- Disenrollment from Medicare Part D after subsidy loss
A multinomial logistic regression model for yearly subsidy status (retained subsidy, temporary loss, extended loss, reduced subsidy, or disenrollment from Medicare Part D) was used, which implemented generalized estimating equations in order to evaluate associations with beneficiary characteristics.
Among nondeemed recipients who received full LIS benefits in December 2007, 39% were younger than 65 years of age; 59% were female; 24% were enrolled in Medicare Advantage; and 1% were American Indian/Alaska Native, 2% were Asian, 21% were Black, 12% were Hispanic, and 63% were White. Further, 10% had extended subsidy losses in 2008, 5% had temporary losses, 2% had subsidy reductions, and 2% had disenrolled from Medicare Part D after losing their subsidy. The mean (standard deviation) of months that beneficiaries spent with without subsidy consisted of 3.3 (3.0) months without subsidy.
Comparing this to 2017, the percentage of racial and ethnic minority group members rose (4% Asian and 16% Hispanic), along with the percentage who were enrolled in Medicare Advantage (45%).
Overall, between 2008 and 2018, investigators determined that roughly 1 in 5 nondeemed beneficiaries lost their Medicare Part D LIS, while nearly all deemed beneficiaries retained their subsidy annually. Temporary subsidy losses were common for nondeemed individuals, which could signify a loss in coverage for minority groups and disabled individuals under the age of 65, according to the study.
The study authors concluded that “efforts to help beneficiaries retain Medicare Part D subsidies are critical for improving drug affordability and adherence among low-income beneficiaries and reducing disparities in medication access.”
Reference
1. Fung V, Price M, Cheng D, et al. Associations Between Annual Medicare Part D Low-Income Subsidy Loss and Prescription Drug Spending and Use. JAMA Health Forum. 2024;5(2):e235152. doi:10.1001/jamahealthforum.2023.5152
