Savings for Seniors Under The Medicare Prescription Drug Benefit

On average, seniors would save about half on their prescription drug spending.

Under the bipartisan agreement, seniors now paying the full retail price for prescription drugs will be able to cut their drug costs roughly in half in exchange for a monthly premium of about $35. In many cases, they'll save a total of more than 50% on what they pay for prescriptions:

Note: assumes 20 percent cost management savings.

Savings on the Medicines Seniors Need
Seniors who choose to enroll in a prescription drug plan will have 75 percent of the cost of their drugs covered (after meeting a $250 deductible), and be responsible for 25 percent coinsurance, up to $2,250 in total spending. Once an enrollee's out-of pocket spending reached $3,600 in any year, the plan would pay for 95 percent of each prescription, and the enrollee would be responsible for 5 percent or a small co-payment. The chart below shows how the discounts and subsidies could apply to some of the drugs seniors use most.

Comparison of Possible Cost-Sharing for Drugs Seniors Use under the Bipartisan Agreement
Selected Popular Drugs for Seniors Plan for Medicare under the Bipartisan Agreement

NOTES: * Price data from "Shopping Smart for Prescription

Drugs

A Guide to Discounts on Medication." Chicago Department of Public Health, Office of Managed Care. Prices are taken from telephone inquiries to a large chain pharmacy in September 2002. Future prices may be different. Calculations assume a 20 percent cost management savings. Actual discounts will vary from drug to drug and plan to plan. ***The Medicare bipartisan agreement provides coverage for 75 percent of enrollees' prescription expenses after a $250 deductible is met, up to $2,250 of total annual spending. Most beneficiaries incur less than $2,250 annually. ****The Medicare bipartisan agreement provides coverage for at least 95 percent of an enrollee's prescription expenses after their out-of-pocket expenses reach $3,600 annually.

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Note

All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last Revised: December 11, 2003

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