Prescription Costs for Medicare Beneficiaries - Western Asset Protection
A bottle of prescription pills in a paper boat made out of a prescription form, floating on water

Prescription Costs for Medicare Beneficiaries

The high cost of prescriptions is a problem for many Americans, especially among the senior population. According to a KFF Health Tracking Poll, 24 percent of seniors who take prescriptions say it’s hard for them to afford their medicine.

Even with Medicare, prescription drugs can be expensive. Here’s what’s being done to help seniors afford their medicine.

The Donut Hole

Medicare prescription drug plans typically had a coverage gap between regular coverage and catastrophic coverage. Known as the donut hole, this coverage gap could result in very high out-of-pocket costs.

The donut hole has been “closed,” providing some relief to seniors with expensive prescriptions. However, as this Forbes article explains, prescriptions won’t be free, and some seniors may still end up paying more.

According to CMS, Medicare enrollees will typically pay 25 percent of drug costs while in the coverage gap. For expensive prescriptions, that can still be a lot.

Rising Prescription Drug Costs

U.S. prescription drug spending currently exceeds $500 billion, according to the Press Democrat, and prices keep rising.

Newsweek has reported numerous prescription drug cost hikes going into effect in 2020. The medications that will see price increases include prescriptions for arthritis and cancer.

Some price hikes are fairly small, but others outpace inflation and put a real strain on budgets. According to WRCB, some combination drugs have experienced price hikes of 1,600 percent.

Prescription price increases impact both individual beneficiaries and the Medicare program itself. CMS has said, “The increase in the Part B premiums and deductible is largely due to rising spending on physician-administered drugs. These higher costs have a ripple effect and result in higher Part B premiums and deductible.”

Negotiating Prices

Under current law, HHS cannot negotiate prescription drug costs. Some people have proposed changing this in order to bring down drug prices.

The House recently passed a bill that would add dental, hearing and vision coverage under Original Medicare while letting the government negotiate prescription drug costs. According to CNBC, the CBO says that this change could result in savings of $456 billion.

Extra Help

Although prescription costs can be a burden for many seniors, Extra Help is available. Low income subsidies can help Medicare enrollees who meet the income and resource requirements. In 2020, Medicare beneficiaries who receive Extra Help will pay no more than $3.60 for each generic prescription drug and $8.95 for each brand-name prescription drug.

If your clients are having trouble paying for prescriptions, encourage them to apply to the program.