USA - The amount of money that low-income seniors spend on prescription drugs will fall nearly 90 percent under Medicare's soon-to-be-implemented prescription drug coverage, a study released today shows. The study indicates that seniors who earn approximately $14,500 or less -- 150 percent of the federal poverty level -- will see their out-of- pocket costs for prescription medications drop from $1,657 to $180 a year.

Although low-income beneficiaries will see the most substantial savings, the analysis of federal health data estimates that all Medicare beneficiaries could save an average of nearly $700 a year in out-of-pocket spending. The report shows that fully 97 percent of Medicare beneficiaries could have drug coverage after the program takes effect, compared to 62 percent who currently have drug coverage.

Medicare Tomorrow: Future Savings for Beneficiaries was released today by Medicare Today, a national partnership of more than 200 organizations committed to providing consumers with objective, easy-to-understand information about Medicare's new prescription drug coverage.

Medicare Today partners include AARP, the American Academy of Family Physicians, the National Association of Chain Drug Stores, the Healthcare Leadership Council and others. Together, the group is conducting a comprehensive outreach program to reach seniors through a grassroots, person-to-person approach, explaining the Medicare drug benefit and other new Medicare features with clarity and objectivity. The partnership will intensify its efforts after Labor Day with informational events in communities nationwide.

"Millions of American seniors will soon be eligible for significant savings on the annual cost of their medications, if they enroll for the new Medicare drug benefit, " said Mary R. Grealy, president of the Healthcare Leadership Council, which is coordinating Medicare Today's efforts. "Many of them are taking multiple medications, but struggle to pay for them each month. The availability of this new coverage will mean that seniors of modest means will no longer have to choose between paying their utility bills and paying for their medications."

The report was prepared for Medicare Today by analysts at PricewaterhouseCoopers, LLP, Washington D.C., and is derived from data from the U.S. Census Bureau's March 2004 Current Population Survey, the Medicare Current Beneficiary Survey, and other sources adjusted to reflect 2006 estimates by the Congressional Budget Office. Additional findings include:

* Seniors who do not currently have prescription drug coverage will see significant savings. The analysis shows that the nearly 11.8 million seniors who do not currently have prescription drug coverage will see their out-of-pocket costs fall by two-thirds -- from $1,905 to $626 a year.

* In all 50 states, at least one in five seniors who are not receiving Medicaid, is without prescription drug coverage. In seven states, more than half of the senior population has no prescription drug insurance

-- including Texas (57 percent), Arkansas (56 percent), South Dakota (56 percent), North Dakota (55 percent), Nevada (53 percent), Georgia (51 percent) and North Carolina (51 percent). In all 50 states, more than 95 percent of seniors will have drug coverage, if all who are eligible enroll in a Medicare prescription drug plan.

* In 31 states, low-income seniors will pay less than the national average in out-of-pocket costs. The analysis estimates that in 31 states, low-income seniors will pay less than the yearly average of $180 in out-of-pocket costs. Seniors with the lowest anticipated costs reside in Hawaii ($144), South Dakota ($146), Alaska ($148), Wyoming ($149) and Montana ($154).

Medicare beneficiaries are eligible to join a new prescription drug program beginning November 15. The coverage will go into effect on January 1, 2006. Seniors joining a prescription drug plan will pay approximately $32 a month for the coverage. The new program will cover 75 percent of seniors' annual drug costs up to $2,200, and nearly all costs over $3,600.

"Although seniors who are living with less money stand to see the biggest results, the research shows that many seniors in the U.S. -- regardless of current income or overall net worth -- may save hundreds of dollars each year. All persons on Medicare will have greater security from the protection this coverage provides against possible future health problems," Grealy said. "It's critical that everyone age 65 and older take the time to find out more about this new benefit and see if it makes sense for them. It is especially important for the millions of people who have no drug coverage at all."

Evidence suggests that seniors need more information about the prescription drug coverage program. A poll conducted by the American Viewpoint public opinion research firm late last year -- nearly one year after Congress enacted the Medicare Modernization Act -- found that only 20 percent of seniors and pre-retirees surveyed said they had a "fair" or better knowledge of the legislation. Medicare Today organizers believe that intensive education activities can improve upon these awareness statistics before the enrollment period begins.

Medicare Today has engaged organizers in every state to coordinate local events in senior centers, senior housing facilities, pharmacies, grocery stores and other gathering places to inform beneficiaries about the new Medicare provisions. Activities will include:

* Presentations to key community organizations, such as senior centers, Rotary clubs, service organizations and local disease/patient support groups, in cities and towns nationwide.

* Informational materials distributed in grocery stores, pharmacies, hospitals, physician offices, health clubs and retirement communities.

* Coordinated efforts with members of Congress and state and municipal elected officials to conduct Town Hall meetings to fully explain the new benefits.

In addition to learning more, those seniors who are eligible are encouraged to enroll early. Those who elect to enroll after May 15, 2006, may be subject to a late-enrollment penalty.

To view the state-specific report, access Medicare Today's interactive tools or to locate Medicare Today activities, visit

Medicare Today is a broad-based partnership of organizations representing seniors, patients, health care groups, employers, and others. The mission of this nonpartisan partnership is to educate and inform Medicare beneficiaries and the public at large on the new benefits provided through The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) and about how millions of seniors will benefit from the new Medicare law.


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