Higher out-of-pocket drug costs signal that these older patients are uninsured
or underinsured for prescription drugs. Inadequate insurance combined with
a low income means that people may not buy the medicines they need, and
suffer worse health outcomes, says K. Tom Xu, Ph.D., assistant professor
of health economics at Texas Tech Health Sciences Center in Lubbock.
Xu’s study appears in the September/October issue
of the journal Health Affairs.
“Elderly consumers overall are financially disadvantaged in out-of-pocket
spending for prescription drugs … compared with working-age adults,” Xu
says. “In particular, the low-income elderly are worse off than
nonelderly adults in the same income group and than their elderly peers
in other income
groups.”
“Medicare reform to include drug coverage will be essential to diminish
these financial disparities,” he says.
About 88 percent of people older than 65 used at least one prescription
drug in 1998, says Xu.
Xu based his study on 1998 federal data on annual out-of-pocket prescription
costs paid by patients — co-payments and other costs not covered
by insurance; the percentage of drug spending represented by that amount;
and the proportion of annual family income paid out of pocket for prescription
drugs. He then categorized this information by age — above or below
age 65 — and household income level.
The difference in out-of-pocket expenses between the elderly and nonelderly
at each income level actually was greater for those above the poverty line
but still with low income. One explanation is that the poorest of poor
are eligible for Medicaid assistance.
Overall, the elderly spent an average of $537 a person
on prescription drugs, compared to $192 by those under 65, a difference
of $345. About
63 percent of the elderly’s drug spending came out of pocket, compared
to 56 percent for younger adults. The sums represented 3.55 percent of
family income for the elderly, but only 1.25 percent for the under-65
group.
The greatest dollar difference in expenditures between elderly and nonelderly
fell on the middle income group (earning about $24,000 to $48,000 in 2003
dollars). However, the largest percentage difference in out-of-pocket spending
fell on the low-income group ($15,000 to $24,000).
“Elderly consumers in this group paid 8.62 cents more out of pocket
than non-elderly adults for every dollar spent on prescription drugs,” Xu
says.
