Annual dollar limits ("caps") on drug benefits have been considered
as a way to provide a national Medicare drug benefit at reasonable costs.
Tseng and colleagues conducted a cross-sectional analysis of 2001 pharmacy
claims data from a Medicare + Choice managed care plan to determine how cap
levels affect the percentage of patients exceeding the cap and their out-of-pocket
drug costs. A total of 22%, 14%, and 4% of Medicare patients exceeded caps
of $750, $1000, and $2000, respectively. After exceeding caps, patients faced
a potential 2- to 3-fold increase in median out-of-pocket costs to continue
using the same prescriptions as before exceeding caps. For patients who exceeded
the lowest cap, yearly out-of-pocket drug costs ranged from $564 to $4201
(5th-95th percentiles). Most of the medications with the highest total prescription
expenditures for patients who exceeded the cap were for chronic conditions.