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

06/19/2002

  • 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.

Estimated Number of Beneficiaries in Each State


Estimated Number of Beneficiaries in Each State Eligible for Reduced Premiums

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

StateNumber of Medicare Beneficiaries (000s)Number Below 150% of Poverty (000s)Share Below 150% of PovertyNumber Below 175% of Poverty (000s)Share Below 175% of PovertyState Medicaid Savings 2005-12 ($Millions)
Alabama67733249%37656%448
Alaska401333%1435%66
Arizona65819229%23736%727
Arkansas43620848%23955%299
California3,8371,51640%1,66443%5,104
Colorado45812928%15834%366
Connecticut51218135%21041%729
District of Columbia763343%3749%60
Delaware1103128%4339%77
Florida2,7711,01937%1,16842%3,198
Georgia89837041%41046%856
Hawaii1625635%5836%121
Idaho1615232%6339%86
Illinois1,62945928%54934%1,902
Indiana84528934%33540%82
Iowa47614931%17437%337
Kansas38912432%13835%330
Kentucky61526743%30650%549
Louisiana59728948%31152%686
Maine2137535%8439%235
Maryland63527944%30147%572
Massachusetts95431032%36738%1,592
Michigan1,38946233%53839%1,176
Minnesota64825239%26140%586
Mississippi41422955%25461%419
Missouri85427833%31437%1,064
Montana1354231%5037%71
Nebraska2529036%9939%243
Nevada2299039%10747%96
New Hampshire1675432%6338%188
New Jersey1,19544537%51743%1,511
New Mexico22913961%14664%87
New York2,6941,21545%1,37251%4,496
North Carolina1,11152647%57352%1,171
North Dakota1035150%6058%62
Ohio1,69254432%64938%1,834
Oklahoma50420841%24749%76
Oregon48414330%16935%1,250
Pennsylvania2,08866832%81939%1,436
Rhode Island1707444%8449%215
South Carolina55525746%30355%395
South Dakota1193832%4538%78
Tennessee81532640%36845%565
Texas2,2231,07048%1,22755%1,994
Utah2015326%7236%91
Vermont883742%4147%124
Virginia87634339%39845%983
Washington72525435%29140%797
West Virginia33614844%16950%162
Wisconsin77719425%23931%830
Wyoming642438%2945%38
United States38,28614,62738%16,74644%40,459

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