Responses to Medicare Drug Costs among Near-Poor versus Subsidized Beneficiaries


Address correspondence to Vicki Fung, Ph.D., Mongan Institute for Health Policy, Massachusetts General Hospital, 50 Staniford St, 9th floor, Suite 901, Boston, MA 02114; e-mail:



There is limited information on the protective value of Medicare Part D low-income subsidies (LIS). We compared responses to drug costs for LIS recipients with near-poor (≤200 percent of the Federal Poverty Level) and higher income beneficiaries without the LIS.

Data Sources/Study Setting

Medicare Advantage beneficiaries in 2008.

Study Design

We examined three drug cost responses using multivariate logistic regression: cost-reducing behaviors (e.g., switching to generics), nonadherence (e.g., not refilling prescriptions), and financial stress (e.g., going without necessities).

Data Collection

Telephone interviews in a stratified random sample (N = 1,201, 70 percent response rate).

Principal Findings

After adjustment, a comparable percentage of unsubsidized near-poor (26 percent) and higher income beneficiaries reported cost-reducing behaviors (23 percent, p = .63); fewer LIS beneficiaries reported cost-reducing behaviors (15 percent, p = .019 vs near-poor). Unsubsidized near-poor beneficiaries were more likely to reduce adherence (8.2 percent) than higher income (3.5 percent, p = .049) and LIS beneficiaries (3.1 percent, p = .027). Near-poor beneficiaries also more frequently experienced financial stress due to drug costs (20 percent) than higher income beneficiaries (11 percent, p = .050) and LIS beneficiaries (11 percent, p = .015).


Low-income subsidies provide protection from drug cost-related nonadherence and financial stress. Beneficiaries just above the LIS income threshold are most at risk for these potentially adverse behaviors.