MEDICARE I: Seniors Without Drug Benefits Pay More
Medicare recipients pay on average 15% more for prescription drugs than patients whose insurers negotiate discounts, according to an HHS study released today by the White House. Taking "direct aim at Republican assertions that the elderly poor are most in need of drug coverage," the study also reveals that one in four beneficiaries with an annual income four times the poverty level -- or about $45,000 for a couple -- lacks drug coverage each year. Because seniors do not have access to discounts and rebate benefits received by insured Americans, many fail to purchase needed drugs, the report states. Roughly 10% of Medicare beneficiaries without drug coverage said they did not fill a prescription in the last year because they could not afford it, compared to only 2% who had coverage. The study, an effort to pressure Congress into creating a universal Medicare drug benefit this year, also shows that the "gap between drug prices for people with and without insurance doubled between 1996 and 1999" (Eilperin, Washington Post, 4/10). The report also found that Medicare recipients without coverage "buy one-third fewer drugs but pay nearly twice as much out-of-pocket as those with coverage"; and rural elderly are 50% more likely to lack coverage than those in urban areas. "People without drug coverage face greater financial burdens and may sometimes be unable to follow the courses of treatment ordered by their physicians. There are even some indications that physicians ... may recommend different therapies to people with and without coverage," the report states. In conjunction with the report's release President Clinton today will announce plans to hold a conference this summer on drug costs and pricing practices (Page, USA Today, 4/10).
Despite news of the report, Republicans, who are planning to introduce their own benefit this week, continued to reject the White House plan. Rep. Bill Thomas (R-Calif.) said, "The point of all this data clearly indicates that what seniors need is a private drug insurance plan that protects them from high out-of-pocket costs. The president's plan doesn't do that, and we will present one that does." Alan Holmer, president of the Pharmaceutical Manufacturers of America, agreed, noting, "Expanded drug coverage is the answer, but the president's plan is the wrong solution. Seniors need to be able to choose the private insurance plan that's best for them, not a big government, one-size-fits-all scheme" (Washington Post, 4/10).