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Out-of-Pocket Pharmacy Expenditures for Veterans Under Medicare Part D

Objectives:Because the VA pharmacy benefit is deemed equivalent coverage to Medicare Part D, veterans can use either or both of these Federal benefits. We sought to determine how these programs’ different benefit structures and low-income assistance thresholds would affect pharmacy out-of-pocket expenses for veterans. Methods:We reviewed income and asset tests performed at the Salt Lake City VA in fiscal year 2005, and estimated the number of individuals, age 65 and older, who meet eligibility for Part D low-income assistance. Using past VA pharmacy utilization data, we estimated the difference in pharmacy out-of-pocket expenditures for veterans eligible for assistance through Medicare but not through the VA. Results:The income and asset thresholds for low-income assistance through Part D were reached by 4127 veterans. From this group, we identified 926 veterans who had used the VA pharmacy during the prior year, who are ineligible for VA copayment waivers, and who qualify for premium waiver under Part D. These veterans’ estimated annual savings ranged from $6 to $714, with an average savings of $353 per year (or 2% of their average annual income) by using Part D. Conclusions:Although VA pharmacy coverage has been deemed to be, on average, equivalent to Part D, some veterans living near poverty can reduce out-of-pocket expenditures by using Medicare prescription coverage. Currently available data can identify veterans who are likely to achieve savings under Medicare.