Comparing Rural and Urban Medicare Part D Enrollment Patterns

University of Minnesota, Rural Health Research Center

May 2013

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 facilitated prescription drug coverage for Medicare beneficiaries through the Part D program. Beginning in January 2006, Medicare beneficiaries enrolled in traditional fee-for-service Medicare could select drug coverage through a stand-alone prescription drug plan while beneficiaries in Medicare Advantage (MA) plans could select an integrated option (MA-PD).

Prior to 2006, approximately 59% of rural beneficiaries and 75% of urban beneficiaries had some type of drug coverage. Rural beneficiaries were more likely to have self-purchased Medigap drug coverage while urban beneficiaries were more likely to have obtained drug coverage through their employers. With the implementation of the Part D program, Medigap prescription drug policies are being phased out and employers are receiving subsidies encouraging them to retain employee drug coverage through the Retiree Drug Subsidy program. The potential benefits of Part D enrollment include improved access to drugs, reduced out-of-pocket drug expenditures, and better health outcomes. The degree to which rural beneficiaries benefit depends on a number of factors, including their health needs, their medication needs, and what type of drug coverage they had prior to Part D enrollment, if any...

Key Findings:

- Overall Medicare Part D enrollment rates increased from 55.5% in 2006, the first year of the program, to 61.4% in 2009. Annual increases were between 1 and 5 percentage points.

- Rural Part D enrollment rates consistently lagged behind urban rates by 2 to 4 percentage points, increasing  from 53.7% in 2006 to 58.6% in 2009, compared to urban rates increasing from 56.0% to 62.3%, respectively. To read more the study's key findings click here.