Medicare Coverage Gap Is Closing, But Prescription Drug Costs Keep Rising
In the United States, more than 10,000 people reach the retirement age of 65 every day. The big 6-5 also coincides with Medicare eligibility periods, which might provide some additional healthcare coverage for many seniors. But Medicare is far from perfect; among its many problems is the so-called “donut hole,” a coverage gap in the plan that provides prescription drug coverage. And while that gap is shrinking this year, the costs of prescription drugs keep increasing — which means that senior patients are paying greater out-of-pocket costs than ever.
The U.S. holds over 45% of the global pharmaceutical market, with many seniors requiring one or more daily prescription medications. Because we’re living longer, we require more medical intervention to allow us to stay healthy. Unfortunately, that comes at a steep price. In fact, patients are still paying thousands of dollars every year on top of their health insurance premiums just to obtain the medications they need.
Since the Affordable Care Act was passed, the coverage gap in Medicare Part D has been narrowing. Those beneficiaries who have Part D coverage had to pay more for their prescription drugs once those costs reached a certain point. Known as the “donut hole,” this policy forced enrollees to pay for 35% of the cost of name-brand drugs and 44% of generic brand drugs once their drug costs hit $3,750. Once their out-of-pocket spending reached $5,000, beneficiaries could exit the “donut hole” and pay no more than 5% of their prescription costs for the remainder of the year. But since the ACA passed, that gap has been closing to ensure that the majority of beneficiaries wouldn’t find themselves trapped in it.
That said, it’s not all good news. Despite the fact that the gap is closing, the cost of prescription drugs themselves is on the rise. In 2010, seniors paid $8,794 out of pocket for specific anticancer drugs available through Medicare Part D. Now, they pay more than $10,000 per year for the same medications. Researchers found that those drug costs rose by an average of 8% over inflation every year during the past decade.
Both old and new medications on the market are being sold at higher price points. Now that the Medicare D gap has closed, seniors are actually paying nearly $1,700 more annually for the same exact products. Last year, 48 of 54 medications studied had monthly prices of over $10,000 per prescription fill, with 21 costing more than $15,000 per fill. For a month’s supply of pills, seniors have to pay several thousand dollars at their local pharmacy, despite the fact that they have healthcare coverage.
Not surprisingly, many seniors are struggling to afford necessary prescriptions. Roughly 5% of adults over the age of 65 do not take their medications as prescribed in order to cut costs, says the U.S. Centers for Disease Control and Prevention. About one in five seniors has asked their doctor to switch them to a more affordable medication. While that might show that senior consumers are being savvier about their spending, the reality is that increasing costs of housing and other factors might simply necessitate bargain shopping. It’s also concerning that seniors are willing to skip doses of medication in order to afford the care they need.
And while policy makers are trying to find ways to lower prescription drug costs, the problem many seniors are facing is reflective of the current state of American healthcare in general: it’s costly, worrisome, and ineffective — and many experts feel there must be a better way.