Medicare :: Major variation in Medicare Rx drug costs

As Congress debates changes to the Medicare Part D prescription drug plans, a new study finds tremendous variation in what seniors in different states pay for the same medications, even if they choose the lowest-cost Part D plans in their areas. The highest costs often occur in the lowest-income, lowest cost-of-living areas.

That change and others might save some seniors a lot of money, suggests a new study from the University of Michigan Medical School. It finds tremendous variation in what Medicare enrollees in different states pay for the same medications, even with the lowest-cost Part D plans.

In fact, two people taking the same drugs but living in different states could face costs that differed by thousands of dollars ? even if each had chosen the lowest-cost plan available to them. And within a state, the difference in a person’s costs for the same drugs could top $10,000 a year or more, depending on which plan he or she chose.

Such wide variation in prices means that Medicare prescription drug plans are substantially more affordable in some states than in others, the authors conclude. In all, depending on which medicines they’re taking and which plan they’re in, people in one state might spend 10 percent of their annual income to pay for prescription drug coverage premiums and co-pays, while someone taking the same medicines in another state would spend 20 percent of their income, the study finds.

The difference in plan costs appears to have little to do with the cost of living in different states, the researchers found. In fact, some of the states with the lowest cost-of-living-adjusted average incomes had some of the highest drug plan costs.

The researchers, led by U-M physician and health care policy researcher Matthew Davis, M.D., M.A.P.P., made the findings using Medicare’s own Web-based calculator for prescription drug plan costs. They analyzed every plan in every state for four real patients who had typical ailments and medication regimens, and looked at what the plans would cost, considering plan premiums, coinsurance, and copays each time a prescription was filled.

The results, published in the January Journal of General Internal Medicine, may help inform the Congressional effort to reform the Medicare drug benefit, including bulk purchasing. Currently, individual Part D plans offered by commercial insurers acquire their own drug supplies at the prices they are able to negotiate with pharmaceutical manufacturers and distributors, and set their own drug lists, premiums and co-pays.

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