Contrary to widespread expectations of substantial relief in the
offing, Medicare beneficiaries, overall, still will have to pay
70 percent of the costs of their prescription drugs under the terms
of the Medicare drug plan passed by the House of Representatives
on June 28.
Moreover, 6.8 million of the elderly and disabled Americans who
receive Medicare benefits will have to pay the full catastrophic
limit of $3,700 a year for prescription drugs, according to an analysis
by Kenneth Thorpe, chair of Health Policy and Management in the
Rollins School of Public Health.
Additionally, 11.7 million Medicare recipients will have to pay
an average of $2,200, Thorpe said, using Congress-ional Budget Office
projections for the year 2005, when the House-approved plan would
go into effect. The scale of those out-of-pocket expenses may be
surprising to some retirees who assume from the news headlines that
Congress has moved halfway toward relief of their prescription drug
cost burden, one of the dominant issues in the 2000 presidential
Much of the debate and rhetoric over the Medicare drug legislation
has led many seniors to expect substantial financial relief from
the high out-of-pocket expenses for their prescription drugs,
Thorpe said. For many, the reality of the House prescription
drug bill may indeed constitute a major shock. Indeed, many Medicare
beneficiaries who incur high drug expenses may expect that the House-passed
bill will reduce substantially their out-of-pocket spending. Yet,
as the analysis reveals, this is not likely to be the case. Indeed,
nearly 50 percent of Medicare beneficiaries will still face annual
out-of-pocket liabilities that average over $2,750 per year.
The Senate currently is considering its own approach to the issue.
Whatever bill it passes will have to be reconciled with the House
Thorpe is an experienced health policy analyst who served from
199395 as deputy assistant secretary for health policy in
the U.S. Department of Health and Human Services.
In that capacity, he coordinated all financial estimates and program
impacts of President Bill Clintons health care reform proposals.
Thorpe also directed the administrations estimation efforts
in dealing with Congressional health care reform proposals during
the 103rd and 104th sessions of Congress. He has held faculty appointments
at the University of North Carolina at Chapel Hill, Harvard and