The Effects of Congressional Proposals on Prescription Drug Costs for Medicare Beneficiaries. Illustrative Beneficiary Scenarios


  • These savings under the House Republican plan will really add up for seniors who now lack drug coverage, as indicated in the following hypothetical but true-to-life examples:
    • Mary Jones spends about $100 a month on medications to control her blood pressure and cholesterol. Because she has no drug coverage, she pays full retail prices for these drugs. Under the House Republican bill her spending on drugs would fall by 67-68 percent – from $1,200 a year to $392-$380 per year. Even adding in her monthly premium costs, her total drug-related expenditures would be cut by about a third to $800-$812 per year.
    • Mary’s sister Beth has the same health problems but paying for her prescriptions is even more difficult because she and her husband live on a fixed income of $18,500 per year. Under the House Republican plan they qualify for full coverage of their monthly drug premiums and would generally have co-payments of only $2-5 per prescription – so her drug spending could fall to under $100 per year.
    • Bob Smith spends about $200 a month on drugs to treat not only his cholesterol and diabetes, but also to treat an early form of prostate cancer and to avoid kidney problems from diabetes. Under the bill his out-of-pocket spending on drugs would drop from $2,400 per year to $800-$860 – about a two-thirds reduction. Even with his premium payments factored in, his total costs for drugs would fall by almost half.
    • John Brown has even higher drug costs – $400 per month. Under the House bill, his out-of-pocket costs would fall to from $4,800 to $2,500-$2,740 per year, even though his drug spending would exceed the bill’s initial coverage limit.
  • Because the House bill makes their drugs more affordable, some beneficiaries may be able to use some of their savings to purchase additional drugs that they need but were previously unable to afford. This could mean somewhat lower reductions in total drug spending – because seniors are getting more and better drug coverage.

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