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Is the Bush Medicare prescription drug benefit a good deal? 

To answer this question, compare what you pay today with what the Medicare prescription drug plan will pay most seniors in 2006.  The table below lists the number of routine prescriptions purchased every month during a year.  For example, a retired person may use a cholesterol-lowering drug, an antidepressant and a new arthritis medication all year.  In this case, the person would be purchasing three prescriptions each month and would look at the costs shown in the third row of the table.

 Number of Prescriptions Purchased each Month *   Annual Prescription Cost   Amount Medicare Pays   Amount Patient Pays**
 1  $1,275 $664 $611
 2  $2,550 $1,290 $1,260
 3  $3,825 $1,185 $2,640
 4  $5,100 $1,080 $4,020
 * Estimated average monthly cost of common prescriptions in 2006 = $106.25
** Patient payment includes monthly premium 
SEE Assumptions below.

U.S. Prescription Prices will Remain Much Higher than in most Countries

The Medicare plan will prevent U.S. consumers from getting lower prices for their drugs  and it will help ensure pharmaceutical company profits because:

The Medicare plan will prevent U.S. consumers from getting lower prices for their drugs  and it will help ensure pharmaceutical company profits because:

  1. It prevents the purchase of prescriptions at the lower prices in other countries and

  2. It prevents Medicare from negotiating lower drug prices as is done in most other countries (that is why prescriptions are cheaper in Canada).

Assumptions:

  • The retail price of commonly used prescriptions will average $106.25 per month.

  • The patient will pay a $35 premium each month to participate in the Medicare prescription drug plan.

  • The plan has a $250 deductible

  • The plan pays 75% of the prescription's cost after the $250 deductible up to a total annual prescription cost of $2250.  The plan pays nothing for annual prescriptions cost above $2250 and $5100.  The $35 monthly premium continues all year even though no benefits are paid between $2250 and $5100.

  • People who are very low income (near poverty level) pay much less than the figures shown here.

  • Prescription expenses above $5100 per year are paid by Medicare at 95% of the cost.