Medicare Prescription Drug Coverage
AARP Bulletin Analysis Finds New Medicare Drug Plans Often Cheaper than Importing from Canada
News Release
December 29, 2005
A new AARP investigation detailed in the January issue of the monthly AARP Bulletin ("The New Math: Cheaper than Canada? The drug benefit may be the better deal") shows that for many Americans, Medicare drug plans that cover all of a beneficiary’s drugs can cost less than buying the same drugs across the border. The calculation takes into account premiums, deductibles, and copayments.
Pill for pill the actual price of some drugs may be cheaper in Canada but Medicare coverage is insurance, and so enrollees are therefore charged only copayments instead of full price. The findings emerged from an analysis of real combinations of drugs taken by people across the country. Using the drug plan finder on Medicare’s website, AARP found the least expensive Medicare “stand alone” plan that covered their drugs and compared that plan’s total cost to what that person spent in a year buying the drugs from an online Canadian pharmacy. AARP used the plans’ 90-day mail-order options because that’s how more than 1 million consumers over 65 routinely get their drugs from Canada.
An example can be found with an interviewee named Donna from Anaheim, California. Donna would pay $2,323.68 overall under a Medicare plan in her area for coverage of her six drugs – nearly $1,400 less than the $3,718.40 charged by a low-cost Canadian pharmacy. This Medicare plan charges relatively high monthly premiums of $50.91 but has no deductible and gives continuous coverage for all her drugs through the “doughnut hole” gap. Her copays would range from $17.50 to $150 for every 90-day supply.
“January 1st is truly a watershed day for many Americans who face the high cost of prescription drugs,” said AARP CEO Bill Novelli. “Millions of Americans who have never had drug coverage can now save more money through Medicare Part D rather than turning to Canada to get their prescriptions.”
In conversations with potential enrollees, AARP is hearing that the focus has shifted from the legislation to choosing the best plan to suit their needs. AARP is also encouraged to hear that adult children are helping their parents through the decision-making process. Time invested in running the numbers is well spent because according to AARP experts, the savings can be tremendous. They recommend potential enrollees follow a few important steps:
- Make a list of the drugs (and dosages) along with the current cost.
- Decide what pharmacy to use.
- Decide how much is affordable each month.
- Continue to talk with family members and friends as a resource.
- Then, review drug plan options on the Medicare drug plan finder and with individual companies offering the plans.
“The important thing is to decide what aspects of a plan are personally most important and you will find the right plan to suit your needs,” said Novelli.
AARP's free publication, "The New Medicare Prescription Drug Coverage: What You Need to Know," is available in Spanish and English to members and non-members alike. This easy-to-understand resource describes how the new plans work and how to find enrollment assistance. To order the publication or get help, people can call AARP toll-free operators at 1-888-687-2277 or go to AARP's educational guide.
Enrollment information is available through state health insurance counseling programs (SHIP) in all 50 states and at many senior centers and offices on aging. Beneficiaries can find their local SHIP office online or by calling 1-800-677-1116.
Medicare’s drug plan finder and other details are also available online. Or beneficiaries can call Medicare toll free at 1-800-633-4227 for assistance.
AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. We produce AARP The Magazine, published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud, our bimonthly magazine in Spanish and English; NRTA Live & Learn, our quarterly newsletter for 50+ educators; and our website. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.