Are You Health-Insurance Literate? A Question for Physicians

‘‘Doctor, can you help me?’’ That is the basic questionbehind every patient–physician encounter, and al-

though our training in medical school has prepared us toanswer it on most occasions, many of us won’t be readywhen 42 million Medicare beneficiaries need the answer tothis question concerning their prescription drug coverage.On December 8, 2003, President Bush signed into law theMedicare Modernization Act (MMA), which legislatedMedicare Part D, the new Medicare prescription drug ben-efit. Although it has been around for nearly 2 years, mostpatients and physicians are still unfamiliar with all of itsdetails or, more importantly, that a Medicare Part D planexists that will be operational on January 1, 2006. Yet wewill need to know quickly.

In a study conducted by the Kaiser Family Foundation,the number one group that Medicare beneficiaries statedthat they would turn to for information regarding the newMedicare prescription drug plan was physicians, with al-most half of those asked stating that their primary caredoctor was where they would turn for help.1 Although theseresults are somewhat different from those found by recentstudies, which instead suggest that patients do not discussmedication cost problems with their physicians,2 it doespoint to the fact that patients want to ask these questionsbut often don’t. Additional studies go on to demonstratethat physicians have not performed well in identifying pa-tients facing prescription access problems3,4 and that partof the reason for this is that clinicians report significantbarriers in assisting patients struggling with out-of-pocketexpenditures.5 Perhaps part of the difficulty with regards tohelping our patients gain greater access to prescriptiondrugs is our own health insurance literacy.

THE IMPORTANCE OF HEALTH INSURANCELITERACY

The reason health insurance literacy is so important wasaddressed in the opening sentence in Drs. Piette and Heis-ler’s article.6 ‘‘Out-of-pocket medication costs and thestructure of patients’ prescription drug benefits significantlyinfluence medication adherence and health outcomes.’’ Thisis supported in many studies, with one particular studyfinding that chronically ill seniors without drug coveragewere twice as likely as those with coverage to skip doses ofmedication for such significant diseases as hypertension,diabetes mellitus, and heart failure.7 The effects on theclinical outcomes of treating these diseases is obvious. A

physician’s best effort to diagnose and treat a patient’s con-dition will be all for naught unless that patient has access tothose treatments.

Knowing this relationship, and with medications in-creasing in their importance and expense, with seniorsspending on average just under $1,500 per year on med-ications, the federal government passed the MMA. TheMMA legislated a new Medicare prescription drug benefitunder Medicare Part D. This new benefit, when used byMedicare beneficiaries, will significantly reduce their out-of-pocket expenditures for medications and as a result, it ishoped, will increase adherence to treatment plans, resultingin improved outcomes. Beneficiaries who qualify for thelow-income subsidy will reduce their out-of-pocket expen-ditures some 83%, non-low income beneficiaries will re-duce their spending 28%.8

PATIENT HEALTH INSURANCE LITERACY

Drs. Piette and Heisler’s study published in this issue ex-amined whether chronically ill patients have gaps in knowl-edge about their prescription drug coverage and therelationship between gaps and medication cost problems.6

They found that, even before Medicare Part D, many olderadults do not know important features of their pharmacybenefits. Those with the greatest difficulty understandingtheir coverage tend to be those with low incomes and racialminorities. This is unfortunate, because this group tends tobe the most in need with the most to gain under MedicarePart D as a result of the low-income subsidy that is availablefor Medicare beneficiaries with limited income and re-sources.

But just simply knowing about the Medicare Part Dbenefit is not enough. A recent Kaiser study shows that,despite an increase in Medicare beneficiaries knowingabout Medicare Part D, fewer are likely to enroll in theprogram. Clearly, it takes the right type of education toencourage enrollment in a program that can significantlyincrease access to medication for all Medicare beneficiariesthrough a reduction in their out-of-pocket expenditures.Physicians are certainly in an ideal position to provide thiseducation.

PHYSICIAN HEALTH INSURANCE LITERACY

The first question that patients will need to answer is shouldthey join a Medicare Part D plan. This answer, in almost allcases, is yes. As previously mentioned, this benefit will re-duce out-of-pocket expenditures. In addition, by joining aplan now, Medicare beneficiaries can avoid having to paya late-enrollment penalty for delaying their coverageDOI: 10.1111/j.1532-5415.2005.00538.x

JAGS 54:166–168, 2006r 2005, Copyright the AuthorsJournal compilation r 2006, The American Geriatrics Society 0002-8614/06/$15.00

decisions. This will be followed by an evaluation of whichplan to join. Each plan will have its own premium, benefitdesign, formulary coverage, and pharmacy network. Medi-care beneficiaries and their physicians can evaluate whichplan is best through the use of the Center for Medicare andMedicaid Services (CMS) Prescription Drug Plan tool find-er, which is available through www.medicare.gov. By en-tering a list of up to 25 medications and one’s ZIP code, alist of the available plans and their cost comparison will bedisplayed. This same information is also available through1-800-Medicare. The next area of assistance that patientswill need involves transitioning from their current medica-tions to those covered under the Medicare prescription drugplan’s formulary. In addition, physicians will be involved inthe ongoing prescribing of medications within these plan’sformularies or be forced to help their patients navigatethrough the exceptions and appeals process. A lack of un-derstanding of the program by many of its key stakeholdershas plagued the Medicare Part D benefit. Some of the com-mon misconceptions regarding Medicare Part D include thefollowing.

� A belief that the Medicare Part D program is only avail-able to low-income seniors. Although a low-incomesubsidy is available through the social security admin-istration, the Medicare Part D program is available toany Medicare beneficiary who is entitled to MedicarePart A or enrolled in Medicare Part B. Some 42 millionAmericans meet this requirement.

� That there is no real savings from this program. Seniorson average will receive a 34% savings in their out-of-pocket expenditures, whereas those eligible for the low-income subsidy will receive a savings of significantlymore. The mind-set needs to shift from a benefit to in-surance. Seniors do not think about how much they arelikely to spend on physician services versus what they willsave by having Medicare Part B. Instead they view Medi-care Part B as insurance against a catastrophic event. Thissame thought process is needed to help Medicare bene-ficiaries appreciate the importance of Medicare Part D.

� That the dually eligible do not need to do anything, be-cause CMS will autoenroll them in a plan. Although it istrue that CMS will randomly assign those individualsidentified as dually eligible, having both Medicare andthe full Medicaid benefit, this process should be viewedas a fail-safe to ensure that these Medicare beneficiariesare not without coverage on January 1, 2006. These in-dividuals should still determine which plan is best forthem and enroll in that specific plan before December31, 2005.

� That this program is called Medicare Part D because ‘‘D’’stands for ‘‘drugs.’’ In fact ‘‘D’’ does not stand for‘‘drugs’’ but was the next letter in the Medicare benefitstructure. Medicare currently has three parts: MedicarePart A Hospital Insurance, Medicare Part B Medical In-surance, and Medicare Part C Medicare Advantage, thenew name for Medicare managed care.

Clearly there is a need to help improve health insuranceliteracy all the way around. Thankfully, there are manyexcellent sites available for information to help with thisprocess (Appendix 1).

FUTURE HEALTH LITERACY AND MORE

Increasingly, physicians will be called upon to answer ques-tions that they have never been trained to answer. The an-swers to these questions will directly affect the healthoutcomes of their patients just as much as knowing thecorrect diagnosis and treatment plan. Physicians not onlyneed to raise their own health insurance literacy, but also tobe more involved so that, as these systems are developed,they carry a clear clinical understanding. This was lackingin the development of the Medicare prescription drug plan,for what clinician would develop a prescription drug cov-erage that excluded such clinically significant medicationsfrom coverage as weight-related medications, barbiturates,and benzodiazepines? Also, a benefit design that has a cov-erage gap or donut hole where patients have 100% respon-sibility is likely to see poor adherence to treatment plansduring that period. These are but two examples that it ishoped will be corrected as clinicians raise their voices andhelp develop clinically appropriate plans. As Medicare at-tempts to modernize itself, it is hoped that physicians willplay an active role in the process of developing systems suchas pay for performance and payment following patient thatpromote optimum clinical outcomes. In the end, we canonly improve the health of our patients if we are prepared toanswer all of their healthcare questions, including these newones concerning Medicare prescription drug insurance.

ACKNOWLEDGMENTS

Financial Disclosure: Dr. Stefanacci has received financialsupport for doing public presentations concerning Medi-care Part D by several pharmaceutical companies: Eisai,Pfizer, Sanofi-Aventis, Merck, Novartis, Sepracor, andSankyo. In addition, the following companies and organ-izations have supported research completed by the Univer-sity of the Sciences Health Policy Institute: Eisai, Amgen,Sanofi-Aventis, Johnson & Johnson, Sepracor, and theAmerican Society of Consultant Pharmacists.

Author Contributions: Dr. Stefanacci is the sole authorof this paper.

Sponsor’s Role: There were no sponsors involved in thepreparation of this paper.

Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMDCMS Health Policy Scholar 2003–04University of Sciences in Philadelphia

Health Policy InstitutePhiladelphia, PA

REFERENCES

1. Kaiser Family Foundation. Seniors’ Sources of Information about New Medi-

care Drug Benefit [on-line]. Available at www.kff.org/healthpollreport/

apr_2005/10.cfm Accessed August 23, 2005.

2. Piette JD, Heisler M, Wagner TH. Cost-related medication under-use: Do pa-

tients with chronic illnesses tell their doctors? Arch Intern Med 2004;164:1749–

1755.

3. Heisler ME, Wagner TH, Piette JD. Clinician identification of patients with

chronic illnesses who face problems paying for prescription medications. Am

J Med 2004;116:753–758.

4. Alexander GS, Casalino LP, Meltzer DO. Patient–physician communication

about out-of-pocket costs. JAMA 2003;290:953–958.

5. Alexander GS, Casalino LP, Tseng CW et al. Barriers to a patient–physician

communication about out-of-pocket costs. J Gen Intern Med 2004;19:856–860.

EDITORIALS 167JAGS JANUARY 2006–VOL. 54, NO. 1

6. Piette JD, Heisler M. The relationship between older adults’ knowledge of their

drug coverage and medication cost problems. J Am Geriatr Soc 2006;54:100–

105.

7. Kaiser Family Foundation. Seniors and Prescription Drugs: Findings from a

2001 survey of Seniors in Eight States: July 2002 [on-line]. Available at

www.cmwf.org/usr_doc/safran_seniors.pdf Accessed August 23, 2005.

8. Mays J, Breener M, Neuman T et al. Estimates of Medicare Beneficiaries’ Out-

of-Pocket Drug Spending in 2006: Modeling the Impact of the MMA: Novem-

ber 2004 [on-line]. Available at www.globalaging.org/health/us/2004/mma.pdf

Accessed August 23, 2005.

Appendix 1. Medicare Prescription Drug Informational Websites

Medicare www.Medicare.govSocial Security Administration www.ssa.govState Health Insurance Counseling and Assistance Programs www.shiptalk.orgKaiser Family Foundation www.kff.orgMedicare Today www.medicaretoday.orgAccess to Benefits www.accesstobenefits.orgAmerican Society of Consultant Pharmacists www.ascp.comAmerican Geriatrics Society www.americangeriatrics.orgAmerican Medical Directors Association www.amda.comAmerican Health Care Association www.ahca.org

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