The Effects of Congressional Proposals on Prescription Drug Costs for Medicare Beneficiaries. Other Key Provisions of the House Republican Plan

• The discussion above focuses on the savings that seniors will obtain once the full Medicare drug benefit is available. But the bill would generate other benefits as well and would not make seniors wait until 2005 to begin getting help with their drug costs.

• Beneficiaries will also see substantial health gains under the House plan. Not only will they gain more affordable access to the medicines they need, but the legislation also ensures the use of electronic prescribing – which should sharply reduce the substantial number of prescribing errors that occur each year. In addition, beneficiaries’ health will be protected – and unnecessary health costs avoided – though disease management programs and the use of automated systems to identify and thus prevent potentially adverse drug interactions.
  • The Institute of Medicine has estimated that as many as 98,000 Americans may die each year due to medical errors, with most of these deaths attributable to medication errors. A recent article estimated that, for the country as a whole, the direct costs of preventable drug-related mortality and morbidity exceed $175 billion per year, with drug related hospital admissions accounting for the majority of these costs.

• Finally, under the House Republican plan, seniors would also benefit immediately from discounts of 15 percent or more on their drug purchases through a Medicare-endorsed discount card program – so they will not have to wait until 2005 before they get any help with their drug costs.

Table 1.

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Estimated Number of Beneficiaries in Each State Eligible for Reduced Premiums

and Cost-Sharing Under House Republican Medicare Bill (and Resulting State Medicaid Savings)

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State	Number of Medicare Beneficiaries (000s)	Number Below 150% of Poverty (000s)	Share Below 150% of Poverty	Number Below 175% of Poverty (000s)	Share Below 175% of Poverty	State Medicaid Savings 2005-12 ($Millions)
Alabama	677	332	49%	376	56%	448
Alaska	40	13	33%	14	35%	66
Arizona	658	192	29%	237	36%	727
Arkansas	436	208	48%	239	55%	299
California	3,837	1,516	40%	1,664	43%	5,104
Colorado	458	129	28%	158	34%	366
Connecticut	512	181	35%	210	41%	729
District of Columbia	76	33	43%	37	49%	60
Delaware	110	31	28%	43	39%	77
Florida	2,771	1,019	37%	1,168	42%	3,198
Georgia	898	370	41%	410	46%	856
Hawaii	162	56	35%	58	36%	121
Idaho	161	52	32%	63	39%	86
Illinois	1,629	459	28%	549	34%	1,902
Indiana	845	289	34%	335	40%	82
Iowa	476	149	31%	174	37%	337
Kansas	389	124	32%	138	35%	330
Kentucky	615	267	43%	306	50%	549
Louisiana	597	289	48%	311	52%	686
Maine	213	75	35%	84	39%	235
Maryland	635	279	44%	301	47%	572
Massachusetts	954	310	32%	367	38%	1,592
Michigan	1,389	462	33%	538	39%	1,176
Minnesota	648	252	39%	261	40%	586
Mississippi	414	229	55%	254	61%	419
Missouri	854	278	33%	314	37%	1,064
Montana	135	42	31%	50	37%	71
Nebraska	252	90	36%	99	39%	243
Nevada	229	90	39%	107	47%	96
New Hampshire	167	54	32%	63	38%	188
New Jersey	1,195	445	37%	517	43%	1,511
New Mexico	229	139	61%	146	64%	87
New York	2,694	1,215	45%	1,372	51%	4,496
North Carolina	1,111	526	47%	573	52%	1,171
North Dakota	103	51	50%	60	58%	62
Ohio	1,692	544	32%	649	38%	1,834
Oklahoma	504	208	41%	247	49%	76
Oregon	484	143	30%	169	35%	1,250
Pennsylvania	2,088	668	32%	819	39%	1,436
Rhode Island	170	74	44%	84	49%	215
South Carolina	555	257	46%	303	55%	395
South Dakota	119	38	32%	45	38%	78
Tennessee	815	326	40%	368	45%	565
Texas	2,223	1,070	48%	1,227	55%	1,994
Utah	201	53	26%	72	36%	91
Vermont	88	37	42%	41	47%	124
Virginia	876	343	39%	398	45%	983
Washington	725	254	35%	291	40%	797
West Virginia	336	148	44%	169	50%	162
Wisconsin	777	194	25%	239	31%	830
Wyoming	64	24	38%	29	45%	38
United States	38,286	14,627	38%	16,746	44%	40,459

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