Disabled seniors formerly on SSDI hit hardest by drug costs

October 07, 2002

Spending on prescription drugs increased more than 60 percent over three years for two million disabled Medicare recipients over 65 who were formerly on Social Security Disability Insurance (SSDI), a recent study has shown.

Nearly half of the SSDI aged had to spend 10 percent or more of their income on medication, the study found.

Dr. Dennis Shea, professor of health policy and administration at Penn State, is first author of the study conducted for the U.S. Department of Health and Human Services. He says, "The disabled elderly who were formerly on SSDI are poorer than Medicare's other beneficiaries and have fewer opportunities for private prescription drug coverage.

"State and Federal relief plans will have to take more account of this forgotten but growing population. Even if given a subsidy, for example, these disabled aged will not be able to find an insurer who can cover their drug costs. Private coverage isn't currently available at a price they can afford," he adds.

The report, The Graying of Medicare's Disabled Population: Implication for a Medicare Drug Benefit, is posted at http://aspe.hhs.gov/daltcp/reports/graying.htm and is based on the 1995 through 1998 Medicare Current Beneficiary Surveys data. Shea's co-authors are Drs. Becky Briesacher, Bruce Stuart and Jalpa Doshi of the Peter Lamy Center on Drug Therapy and Aging at the University of Maryland.

Currently, Medicare covers about five million recipients of Social Security Disability Insurance (SSDI) who are under 65 years of age and about two million over 65 who originally entered the program under SSDI. As the SSDI population ages, the study found, they retain lower income, poorer health, heavier prescription use and higher medication bills than the rest of the Medicare population. The study found that SSDI beneficiaries, on average, spent more than $1200 annually on prescription drugs, 40 percent more than the rest of the Medicare population in 1998. Disabled aged beneficiaries spent almost $1300 on drugs that year. Between 1995 and 1998 prescription spending among all Medicare beneficiaries rose 45 percent. The increase for disabled aged was 60 percent and 43 percent of them paid 10 percent or more of their income for drugs in 1998.

Shea notes that today the dollar figure for drug spending by the disabled aged could be as high as $3000 to $5000 annually due to increased costs.

He notes, "The situation can be expected to get even worse since employers are cutting back on benefits, Medicaid is trying to slash costs by targeting drugs, HMOs are cutting back benefits and private and public services are providing lower levels of support than in the past."

The researchers found that SSDI recipients and the disabled aged are less likely to receive employer coverage and more likely to rely on Medicaid and other public sources of support than other Medicare beneficiaries.

"Since most disabled aged have long-standing chronic illnesses, as well as the common diseases associated with aging and use multiple medications to manage their health, a potential insurer, such as an HMO, can know exactly how much it will cost to provide medication and has a strong incentive to try to avoid insuring them," he said.

Shea adds, "With the Federal budget surpluses gone, it will be difficult to find a way to aid the disabled aged and add prescription drug coverage to Medicare. Still, legislators in Washington appear to have found money for givebacks to health care providers, including hospitals, doctors, and HMOs. These disabled aged individuals are unlikely to be served by the private market, but Washington seems unwilling to recognize their needs."
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Penn State

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