Medicare Prescription Drug Plans Require More Out-of-Pocket Spending

Prescription pill bottles
Prescription pill bottles
Medicare beneficiaries spent more out of pocket for generic medications used to treat cardiovascular disease than patients using standalone prescription drug plans.

In 2017, many Medicare prescription drug plans required patients to spend more money out of pocket than Walmart’s generic drug discount program, according to a brief report published in Annals of Internal Medicine.

Researchers sought to compare Medicare beneficiaries’ out-of-pocket costs with those of Walmart’s generic drug discount program; specifically, the cost of a 30-day supply of generic medications used to treat cardiovascular disease (CVD) and related conditions. Generic medications used to treat 7 CVD-related conditions were identified through Walmart’s September 2017 generic drug discount program list. Conditions included hypertension, hyperlipidemia, diabetes, ischemic heart disease, heart failure, atrial fibrillation, and stroke.

The study’s primary objectives were to determine the proportion of plans that required patients to spend more than $4 out of pocket for a 30-day supply of drugs and each drug’s median out-of-pocket cost. The researchers stratified their analyses by plan type (Medicare Advantage vs standalone prescription drug plans) and tier category (tier 1 and select care tiers vs all others).

A total of 2155 Medicare prescription drug plans, 1533 Medicare Advantage plans, and 622 standalone plans were included in the study. Using the Walmart generic drug discount program list, 27 generic medications were identified.

The median proportion of plans that required patients to spend more than $4 out of pocket for covered medication was 21.0% across all medications and tiers. Between Medicare Advantage prescription drug plans and standalone plans, this median proportion differed significantly (9.9% vs 1.9%, respectively; P <.001). The median proportion differed significantly for medications covered in other tiers as well (95.6% vs 45.9%; P <.001).

Across all tiers, the median total out-of-pocket cost of covered medications was $2. Again, these costs differed significantly between Medicare Advantage and standalone prescription drug plans for medications covered in tier 1 and select care tiers ($2 vs $1; P <.001) and for medications covered in other tiers ($10 vs $3; P <.001).

“[Medicare Advantage prescription drug plans] consistently required patients to spend more out of pocket than standalone [prescription drug plans], a counterintuitive finding considering that [Medicare Advantage] plans are responsible for acute care coverage, outpatient services, and other health care expenses for their beneficiaries and not solely pharmaceutical services like standalone [prescription drug plans],” the researchers wrote.

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The researchers noted 2 limitations of their study: the number of beneficiaries enrolled in each plan was unknown and the findings may not be generalizable to other drug classes (ie, outside of CVD-related medications).

With that said, paying the lowest price possible for generic medications could improve adherence in Medicare beneficiaries, and by extension, their clinical outcomes.


Liu P, Dhruva SS, Shah ND, Ross JS. Medicare beneficiary out-of-pocket costs for generic cardiovascular medications available through $4 generic drug discount programs [published online July 23, 2018]. Ann Intern Med. doi:10.7326/M18-0965