Prescription Drug Coverage for Medicare Beneficiaries

Forty million elderly and disabled Americans receive health care coverage through the federal Medicare program.  When Medicare was enacted in 1965, it covered the most important elements of medical care at that time – hospitalization and physician care.  Since then the advance of drug therapies have changed medical care dramatically, but Medicare has not kept pace.  Medicare does not cover outpatient prescription drugs.  And while the majority of Medicare beneficiaries have some form of supplemental drug insurance, the scope of that coverage and access to it is declining.  Thus, one-third of Medicare beneficiaries have no prescription drug coverage at all.

The number of employers who sponsor retiree health benefits has declined in recent years.  From 1999 to 2001, the share of large employers offering coverage to individuals 65 and over declined from 41% to 34%.  Between 1999 and 2002, the percentage of Medicare HMOs offering drug coverage declined from 73% to 66%.  In addition, a 2002 survey by the Kaiser Family Foundation and the Commonwealth Fund found that the availability of supplemental sources of prescription drug coverage varies widely from state to state.  In short, Medicare beneficiaries lack access to a uniform and secure prescription drug benefit.

Virtually all Medicare beneficiaries use prescription drugs on a regular basis, filling an average of 23 prescriptions per year.  In 2002, the average Medicare recipient spent an estimated $2,149 on drugs, and the Congressional Budget Office estimates that this amount is increasing by 13% each year.  The 2002 Kaiser survey found that nearly one quarter of seniors do not fill a prescription because it is too expensive; or they skip doses of medication to make them last longer.  Many seniors report that they cut back on household expenses, including food, clothing, home repairs and long distance telephone calls to their families, in order to buy prescription drugs.

Therefore, the JCPA calls upon the federal government to pass a Medicare prescription drug benefit for Medicare recipients.  Legislation should:

• Assure that no Medicare recipient will be denied access to prescription drugs because of income level;
• Provide a benefit that is affordable to everyone, comprehensive and without significant gaps in coverage;
• Provide a benefit that is predictable and secure; and not funded at the expense of existing Medicare services.
• Provide a benefit that is publicly administered, like the traditional fee-for-service Medicare system, and not administered through private, for-profit insurance companies.

The community relations field should:

• Educate the public on the need for prescription drug coverage for Medicare beneficiaries.
• Urge Congressional representatives to enact legislation to provide a prescription drug benefit for Medicare beneficiaries.

• Work with federal and state government agencies and local coalition partners to ensure that Medicare beneficiaries are aware of options for prescription drug coverage, including state and supplemental programs.