ElderWeb

The Department of Health and Human Services (HHS) released a report about cost and access to drugs for Medicare beneficiaries. The report found, among other things, that seniors who do not have insurance for drug costs not only must pay for those costs out of pocket, but also pay higher prices than those in health plans. In 1999, excluding the effect of rebates, the typical cash customer paid nearly 15% more than the customer with third party coverage. For a quarter of the most common drugs, the price difference between cash and third parties was even higher, over 20%. For the most commonly prescribed drugs, the price difference between cash customers and those with third party coverage grew substantially larger between 1996 and 1999.

The report also found that drug benefits, where available, are becoming less generous. Cost sharing for prescription drugs is increasing and that caps on coverage are becoming more common and are being set at lower levels. 86% of plans have annual dollar limits on drugs, including 70% of plans with annual caps of $1,000 or less, and 32% with caps of $500 or less per enrollee - up from 35% and 19% in 1998. Of those employers that still offer medical coverage, the survey found that 40% are requiring Medicare-eligible retirees to pay the full cost of their benefits, compared to 28% in 1995.