New Part D drug program will cut costs for low-income
seniors 90 percent
Aug. 25, 2005 – The average Medicare beneficiary
will save about $700 on drug expenditures next year under the new
prescription drug program – Medicare Part D. Low-income senior citizens,
however, will see savings of nearly 90 percent, according to a new study
released today.
The study indicates that seniors who earn
approximately $14,500 or less -- 150 percent of the federal poverty
level -- will see their out-of- pocket costs for prescription
medications drop from $1,657 to $180 a year.
Although low-income beneficiaries will see the most
substantial savings, the analysis of federal health data estimates that
all Medicare beneficiaries could save an average of nearly $700 a year
in out-of-pocket spending.
The report shows that fully 97 percent of Medicare
beneficiaries could have drug coverage after the program takes effect,
compared to only 62 percent who currently have drug coverage.
Medicare Tomorrow: Future Savings for Beneficiaries
was released today by Medicare Today, a national partnership of more
than 200 organizations committed to providing consumers with objective,
easy-to-understand information about Medicare's new prescription drug
coverage.
"Millions of American seniors will soon be eligible
for significant savings on the annual cost of their medications, if they
enroll for the new Medicare drug benefit, " said Mary R. Grealy,
president of the Healthcare Leadership Council, which is coordinating
Medicare Today's efforts. "Many of them are taking multiple medications,
but struggle to pay for them each month. The availability of this new
coverage will mean that seniors of modest means will no longer have to
choose between paying their utility bills and paying for their
medications."
The report was prepared for Medicare Today by
analysts at PricewaterhouseCoopers, LLP, Washington D.C., and is derived
from data from the U.S. Census Bureau's March 2004 Current Population
Survey, the Medicare Current Beneficiary Survey, and other sources
adjusted to reflect 2006 estimates by the Congressional Budget Office.
Additional findings include:
* Seniors who do not currently have prescription
drug coverage will see
significant savings. The analysis shows that the nearly 11.8
million
seniors who do not currently have prescription drug coverage will
see
their out-of-pocket costs fall by two-thirds -- from $1,905 to $626
a
year.
* In all 50 states, at least one in five seniors
who are not receiving
Medicaid, is without prescription drug coverage. In seven states,
more
than half of the senior population has no prescription drug
insurance
-- including Texas (57 percent), Arkansas (56 percent), South
Dakota
(56 percent), North Dakota (55 percent), Nevada (53 percent),
Georgia
(51 percent) and North Carolina (51 percent). In all 50 states,
more
than 95 percent of seniors will have drug coverage, if all who are
eligible enroll in a Medicare prescription drug plan.
* In 31 states, low-income seniors will pay less
than the national
average in out-of-pocket costs. The analysis estimates that in 31
states, low-income seniors will pay less than the yearly average of
$180 in out-of-pocket costs. Seniors with the lowest anticipated
costs
reside in Hawaii ($144), South Dakota ($146), Alaska ($148),
Wyoming
($149) and Montana ($154).
Medicare beneficiaries are eligible to join a new
prescription drug program beginning November 15. The coverage will go
into effect on January 1, 2006. Seniors joining a prescription drug plan
will pay approximately $32 a month for the coverage. The new program
will cover 75 percent of seniors' annual drug costs up to $2,200, and
nearly all costs over $3,600.
"Although seniors who are living with less money
stand to see the biggest results, the research shows that many seniors
in the U.S. -- regardless of current income or overall net worth -- may
save hundreds of dollars each year. All persons on Medicare will have
greater security from the protection this coverage provides against
possible future health problems," Grealy said. "It's critical that
everyone age 65 and older take the time to find out more about this new
benefit and see if it makes sense for them. It is especially important
for the millions of people who have no drug coverage at all."
Evidence suggests that seniors need more
information about the prescription drug coverage program. A poll
conducted by the American Viewpoint public opinion research firm late
last year -- nearly one year after Congress enacted the Medicare
Modernization Act -- found that only 20 percent of seniors and
pre-retirees surveyed said they had a "fair" or better knowledge of the
legislation. Medicare Today organizers believe that intensive education
activities can improve upon these awareness statistics before the
enrollment period begins.
Medicare Today has engaged organizers in every
state to coordinate local events in senior centers, senior housing
facilities, pharmacies, grocery stores and other gathering places to
inform beneficiaries about the new Medicare provisions. Activities will
include:
* Presentations to key community organizations,
such as senior centers,
Rotary clubs, service organizations and local disease/patient
support
groups, in cities and towns nationwide.
* Informational materials distributed in grocery
stores, pharmacies,
hospitals, physician offices, health clubs and retirement
communities.
* Coordinated efforts with members of Congress
and state and municipal
elected officials to conduct Town Hall meetings to fully explain
the
new benefits.
In addition to learning more, those seniors who are
eligible are encouraged to enroll early. Those who elect to enroll after
May 15, 2006, may be subject to a late-enrollment penalty.
Medicare Today is a broad-based partnership of
organizations representing seniors, patients, health care groups,
employers, and others. The mission of this nonpartisan partnership is to
educate and inform Medicare beneficiaries and the public at large on the
new benefits provided through The Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (MMA) and about how millions
of seniors will benefit from the new Medicare law.
Medicare Today partners include AARP, the American
Academy of Family Physicians, the National Association of Chain Drug
Stores, the Healthcare Leadership Council and others.
Together, the group is conducting a comprehensive
outreach program to reach seniors through a grassroots, person-to-person
approach, explaining the Medicare drug benefit and other new Medicare
features with clarity and objectivity. The partnership will intensify
its efforts after Labor Day with informational events in communities
nationwide.
