Meyers Primary Care Institute
Medical Subject Headings
Medicare; Medicare Part D; Prescription Drugs; Rural Population
Health Services Research | Primary Care
Report citation: Lambrew J, Briesacher B. Medicare prescription drug legislation: What it means for rural beneficiaries. Washington DC: Center for American Progress, September 2003. Link to publisher's website
Executive Summary: Congress is currently debating legislation that would not only add a prescription drug benefit to Medicare but create an unprecedented role for private health insurers in delivering all Medicare services. Such changes would have profound effects on the 41 million people covered by Medicare -- particularly the one in four who lives in rural America. Previous studies have shown that rural beneficiaries have different health care needs and delivery systems than their urban counterparts. Indeed, the bills that passed the House and Senate address payments to rural hospitals and other providers. However, less attention has been paid to the rural beneficiary implications of the prescription drug benefit and private plan reforms included in the Medicare legislation. This study does so, through new data analysis and synthesis of existing information. The results of this study underscore the unique challenges that face Medicare’s 9 million rural beneficiaries today and under the Medicare proposals under consideration. New analysis shows that rural beneficiaries are, relative to urban beneficiaries, older, sicker, and poorer and have a greater need for a Medicare drug benefit. They are nearly twice as likely to lack any type of insurance coverage for prescription drugs. However, the design of a Medicare prescription drug benefit is critical to ensuring that the unique needs of Medicare’s rural beneficiaries are met. Rural beneficiaries would be disadvantaged by a Medicare prescription drug benefit that has weak protections for low-income beneficiaries – or excludes them altogether. Their higher incidence of chronic illnesses like arthritis and heart disease would leave them vulnerable to higher prescription drug cost sharing and premiums if private insurers rather than Medicare were to define the benefit. In addition, a prescription drug benefit that relies exclusively on private insurers could create serious access problems for rural beneficiaries. This study shows that private insurers have proven unreliable in rural areas: they are less likely to serve rural areas, and when they do, they are less likely to maintain service over a sustained period of time. Finally, reforms outside the addition of a prescription drug benefit could exacerbate the current inequities caused by Medicare funding of supplemental health benefits only through private plans. Not only do rural beneficiaries have less access to subsidized benefits through private plans, but they would fund these benefits through higher Medicare premiums. The report concludes by recommending that stronger protections for low-income and sicker beneficiaries, a more stable prescription drug delivery system, and a more equitable allocation of Medicare subsidies for supplemental benefits – rather than concentrating them in private plans -- would make the ultimate Medicare legislation more responsive to rural beneficiaries’ circumstances.
Lambrew, Jeanne M. and Briesacher, Becky A., "Medicare Prescription Drug Legislation: What It Means for Rural Beneficiaries" (2003). Meyers Primary Care Institute Publications and Presentations. Paper 331.