Switching Health Plans to Obtain Drug Coverage

The recent rapid increase in both the pharmaceutical armamentarium and drug spending has made the anachronism of no Medicare outpatient drug benefit an increasing burden for Medicare beneficiaries. Not surprisingly, discussions of a new Medicare drug benefit are prominent on the current political agenda. Despite the lack of coverage in the program, more than half of Medicare beneficiaries have some coverage for drugs, which they obtain through 1 of 4 sources: supplemental or retiree health insurance through a former employer; Medicaid; individual Medigap policies that cover drugs; or managed care organizations. In 1995, the proportions of beneficiaries who obtained coverage for drugs through these 4 sources were 31%, 12%, 11%, and 7%, respectively. However, in light of the growth in managed care enrollment since 1995, the proportion of Medicare beneficiaries who obtain coverage for drugs through managed care organizations is probably around 10% today. (April 26, 2000)