The Medicare Chartbook
Why a Medicare Drug Benefit is Needed
Seniors and
disabled persons have the greatest need for prescription medicines.
Many elderly people do not have prescription drug coverage, however,
because Medicare--the federal health insurance program that covers
40 million elderly and disabled Americans--does not cover outpatient
prescription drugs.
An outpatient drug benefit is essential today
because many of the diseases that required hospitalization, surgery,
or other treatment when the Medicare program was created in 1965
now can be more effectively and less expensively treated with medicines.
Because of the lack of an outpatient drug benefit, the Medicare
program is biased toward treating seniors once
hospital care is needed rather than providing drug treatments that
could have kept them out of the hospital in the first place. In 2001,
more than 15 million Medicare beneficiaries lacked drug coverage.
Medicare beneficiaries account for 14 percent of the U.S. population,
but 43 percent of the nation's total drug expenditures (Kaiser Family
Foundation, May 2001).
Prescription medicines account for nine cents
out of every health care dollar and are the best value in health care
today. Prescription drugs improve patients' lives, help enhance workers'
productivity, and, because they are in many cases the most cost-effective
form of health care, reduce overall health-care costs.
PhRMA
believes that providing a Medicare drug benefit would:
-
Provide
beneficiary access to the best and most appropriate drug treatment,
thereby improving
the health and quality of life of more patients while also reducing
system-wide costs.
- Minimize
out-of-pocket costs for beneficiaries, especially for those least
able to bear the cost
of essential medicines.
- Eliminate
financial barriers that currently force many uninsured beneficiaries
to forgo or
restrict their use of needed medicines.
- Secure stable
drug coverage for Medicare beneficiaries—many who currently
obtain coverage
through a patchwork of sources at varying costs—to reduce
the financial burden associated
with prescription medicine purchases.
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