An analysis from the Kaiser Family Foundation quantifies, for the first time, the number of Medicare Part D plan enrollees in 2007 who reached a gap in their prescription drug coverage known as the “doughnut hole,” as well as the changes in beneficiaries’ use of medications and out-of-pocket spending after they reached that gap.

The study excludes beneficiaries who receive low-income subsidies (because they do not face a gap in coverage under their Medicare drug plan).

Approximately 3.4 million Part D enrollees, including many with serious medical conditions, reached the coverage gap in 2007, leading some to stop treatment, according to the analysis.

Beneficiaries taking drugs for serious chronic conditions had a substantially higher risk of a gap in coverage under their Medicare drug plan. For example, 64 percent of enrollees taking medications for Alzheimer’s disease reached the coverage gap in 2007, as did 51 percent of those taking oral anti-diabetic medications and 45 percent of patients on antidepressants.

Conducted by researchers at Georgetown University, National Opinion Research Center at the University of Chicago and Kaiser, the study found evidence of patients changing their use of prescription drugs when they are required to pay the full cost of medications in the coverage gap. Across eight classes of drugs examined—used to treat a variety of relatively common chronic conditions—15 percent of Part D enrollees who reached the gap stopped their drug therapy for that condition, 5 percent switched to another medication in the class, and 1 percent reduced the number of drugs they were taking in the class.

”The Medicare drug benefit has produced tangible relief for millions of people, despite the unusual coverage gap that was created to make the benefit fit within budget constraints,” Kaiser CEO and President Drew Altman said. “But if a new president and Congress consider changes to the drug benefit, it will be important to keep in mind that the coverage gap has consequences for some patients with serious health conditions.”

Beneficiaries who reached the coverage gap faced substantial increases in out-of-pocket spending. For example, among Part D enrollees who reached the coverage gap, but did not receive catastrophic coverage, average monthly out-of-pocket costs nearly doubled from $104 prior to the coverage gap, to $196 in the “doughnut hole.” The vast majority (84 percent) of the Part D enrollees who reached the coverage gap did not have sufficient additional drug spending during the year to receive catastrophic coverage, at which point their Part D plan would pay 95 percent of drug costs.

The study analyzes retail pharmacy claims data, based on 4.5 million Medicare beneficiaries in Part D plans in 2007, the first year that most people would be enrolled in a Part D plan for a full calendar year. The analysis is based on 2007 data from IMS Health’s Longitudinal Prescription Drug Database, which includes prescription drug information that represents half of all retail prescriptions filled in the U.S.

In 2008 the gap starts when a recipient has used $2,510 worth of medications; coverage does not resume until they have used a total of $5,726 in covered prescriptions, creating a coverage “gap” of $3,216.

The research team includes: Jack Hoadley of Georgetown University, Elizabeth Hargrave of NORC at the University of Chicago, and Juliette Cubanski and Tricia Neuman at the Kaiser Family Foundation.

— Lori Woehrle