New Medicare Drug Benefit Treats Seniors Unequally

Near-poor who are not eligible for subsidies could have higher out-of-pocket costs than wealthier seniors

TUESDAY, Jan. 10 (HealthDay News) -- The new Medicare drug benefit may yield modest savings in out-of-pocket drug spending for most seniors, but Hispanics and blacks who do not receive low-income subsidies may save less than whites in the same situation, according to a study in the January/February issue of the journal Health Affairs. In addition, the near-poor may have higher out-of-pocket costs than wealthier seniors.

Walid Gellad, M.D., of Brigham and Women's Hospital in Boston, and colleagues analyzed the impact of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 on vulnerable populations. The researchers analyzed out-of-pocket spending for a sample of 5,996 seniors over age 65 who qualify for the new drug benefit. They specifically focused on the chronically ill, ethnic minorities and near-poor recipients ineligible for low-income subsidies.

Seniors without employer-related coverage save an average of $478 with the new drug benefit, but blacks and Hispanics save about $237 less than whites per year in out-of-pocket costs. Seniors with employer-sponsored coverage will pay an average of $132 more if they join the Medicare benefit. And about 35% of seniors with multiple chronic conditions will fall into the coverage gap, where they must pay 100% of drug costs if their annual drug expenditures are between $2,250 and $5100 annually.

"Hispanics and blacks who do not receive subsidies might save less than whites, after differences in income and prevalence of chronic illnesses are accounted for," the authors write. "The bill also leaves others, such as the near-poor who do not qualify for subsidies, with overall out-of-pocket costs still higher than those of wealthier seniors."

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