Elderly in Medicare Plan Pay Higher Costs, Study Shows

WASHINGTON — Elderly Americans in Medicare's prescription drug program are more likely to pay at least $300 a month for medicines than those on other plans, a study found.

Eight percent of senior citizens in the American government's Medicare plans spent that much out-of-pocket for drugs, compared with 5% of those covered by workplace insurance or by the Veterans Affairs Department, according to a survey published yesterday on the Web site of the journal Health Affairs. Medicare recipients were also more likely to delay or forgo filling prescriptions because of the cost.

About 24 million elderly Americans have signed up for Medicare's Part D drug coverage since it took effect last year, and surveys have found high satisfaction among participants. The lobbying group AARP and Democrats in Congress have pressed for legislation requiring Medicare to negotiate drug prices directly with manufacturers in an effort to bring down costs.

"In general, Part D offered less financial protection to seniors" than employer plans or the Veterans Affairs program, according to authors of the study of 16,000 Medicare beneficiaries.

The Veterans Affairs department negotiates prices for drugs it covers. It also limits the medicines that are offered to an approved list, a restriction that Democrats oppose for Medicare.

Medicare drug beneficiaries pay an average of $23 a month for coverage. In some states, participants have a choice of more than 50 plans offered by Aetna Inc., Humana Inc., UnitedHealth Group Inc., and other companies.

In 2005, before introduction of the Medicare plans, about 33% of elderly Americans surveyed lacked any drug coverage. Within a year, that fell to about 8.5%.

"This is a success," said Stuart Guterman, senior program director at the Commonwealth Fund and an author of the report. "But then you get to the point that the coverage they have under Medicare plans isn't as protective against high drug costs as employer-based or veterans coverage."

About 20% of enrollees surveyed in the Medicare-sponsored plans didn't fill or delayed filling prescriptions, compared with 8% in employer plans and 12% in VA plans.

"If seniors are not filling their prescriptions, that could have serious quality of care implications," said Patricia Neuman, director of the Medicare policy project at the Henry J. Kaiser Family Foundation, and the study's lead author. The survey, conducted by researchers at the Commonwealth Fund in Washington and the Kaiser Foundation in Menlo Park, Calif., found that one in four of those in Medicare plans pay at least $100 a month for drugs.

This is a "significant amount when you consider drugs are just one part of seniors' overall health care costs," Kaiser said in a statement sent by e-mail.

The average premium cost to enrollees next year will be $25 a month, according to the U.S. Centers for Medicare and Medicaid, which picks up about 75% of the cost for drug coverage.

One reason that seniors in Medicare-subsidized plans pay more may be a gap in coverage, the study said. The gap, known as the "doughnut hole," begins after total drug spending reaches $2,400 in a year. Seniors must pay all of the next $3,051.25 before insurance starts paying again.