The Effects of Congressional Proposals on Prescription Drug Costs for Medicare Beneficiaries. State-by-State Analysis of Help for Lower-Income Seniors and Savings for State Governments


  • The House Republican plan recognizes that seniors with the lowest incomes have the greatest difficulty affording the drugs they need. That is why it offers substantial premium subsidies and only nominal co-payments to those beneficiaries with incomes below 175% of poverty.
  • Table 1 (attached) shows that about 15 million elderly and disabled Americans with incomes below 150% of poverty would qualify for full assistance with their premiums and cost-sharing – or about 38 percent of all Medicare beneficiaries. In states with a disproportionate number of lower-income seniors, the share helped is even larger.
  • Another 2 million seniors with incomes between 150% and 175% of poverty would also get added help with their drug benefit premiums and would get the same assistance with cost-sharing – so they will face no deductible and will generally have co-payments of $2-5. And the number of seniors helped by these provisions will only grow over time as the total number of beneficiaries enrolled in Medicare increases.
  • About 4 million of these lower-income seniors lack any drug coverage today, and thus will see the kind of dramatic reductions in their drug costs highlighted above.
  • For more than 5 million seniors and disabled citizens who already get drug coverage through Medicaid, the House Republican plan recognizes that they are Medicare beneficiaries first and poor second – and thus gradually lifts the burden on states of providing this additional help to lower the drug costs for Medicare beneficiaries who are on Medicaid. The resulting savings for states are projected to total $40 billion over 10 years; the last column of Table 1 provides an estimate of how these savings would accrue to each state over the next 10 years.
  • In addition, states with their own drug assistance programs for seniors who do not qualify for Medicaid – including Pennsylvania, New York, New Jersey, Connecticut and Massachusetts with larger programs – would see their costs reduced substantially. The same would be true for states like Illinois that have recently received waivers from HHS to use existing funds to expand drug coverage for Medicare beneficiaries with incomes up to 200 percent of poverty.

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"PrescriptionDrugCosts.pdf" (pdf, 41.65Kb)

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