Current Knowledge of Third Party Outpatient Drug Coverage for Medicare Beneficiaries
February 1999
Pharmaceutical Research and Manufacturers of America (PhRMA)
Lewin contact: Lisa Alecxih
Elderly patients paid for more than half (52%) the cost of their prescriptions out of their own pockets, according to a recent study for the Pharmaceutical Research and Manufacturers of America. This is not surprising since Medicare does not, for the most part, cover outpatient prescribed medications.
The study reviewed third party coverage options for pharmacy coverage (total average per beneficiary spending of $571 per person) as based on 1995 data. It showed that employers were the second largest source of payment (26%) through supplemental insurance. Beneficiaries with employer supplemental insurance drug coverage spent 31% out-of-pocket, while those with Medigap spent 60%, and those with Medicare HMO coverage spent 37% out-of-pocket. Additionally, only about 36% of beneficiaries with less than $10,000 in income had drug coverage, compared to 71% among those with $50,000 or more in income.
The study also showed that Medicare beneficiaries at the extreme ends of the income spectrum (that is, those poor enough to qualify for full dual Medicare/ Medicaid coverage or those with full coverage from employer-provided supplemental health plans) had the most extensive coverage. Those at greatest risk were the middle group: beneficiaries with individually purchased Medigap coverage have no or limited drug benefits.