Estimated annual average premium under both bills, in addition to beneficiary out of pocket costs: $420
The typical senior will have an estimated $3,160 in total drug expenses in 2006 (Kaiser Family Foundation Medicare and Prescription Drug Spending Chartpack, June 2003).
Standard coverage under S.1 (as passed by the Senate) includes an upfront deductible of $275, 50% cost sharing between $275 and $4,500, no coverage after $4,500 until the beneficiary reaches $3,700 in out of pocket costs ($5,813 in total drug expenses), beyond which 10% cost sharing applies. Premiums may vary by region, and private plans may vary benefits so long as they are actuarially equivalent to the standard coverage.
Standard coverage under H.R. 1 (as passed by the House) includes an upfront deductible of $250, 20% cost sharing between $250 and $2,000 in drug costs, no coverage after $2,000 until the beneficiary reaches $3,500 in out of pocket costs ($4,900 in total drug expenses), beyond which drug expenses are covered in full. The $3,500 out of pocket limit would apply to individuals with incomes up to $60,000 per year. Individuals with higher incomes would face larger limits (e.g., $5,820 at an income of $100,000). Premiums may vary by region, and private plans may vary benefits so long as they are actuarially equivalent to the standard coverage.
The calculator illustrates out-of-pocket drug expenses for beneficiaries who sign up for the new program. Coverage under both bills would be voluntary. These numbers do not include the effects of having other sources of coverage to supplement Medicare, such as employer-sponsored retiree health benefits. Low-income Medicare beneficiaries -- including those who receive Medicaid coverage in addition to Medicare -- would receive assistance with their drug costs, but the House and Senate bills vary in how much additional help is provided, and who would be eligible for this assistance.
Additional Kaiser Family Foundation resources available as background on Medicare prescription drugs include:
