The Case for Guaranteed Access to Prescription Drugs

It turns out, providing universal access to prescription drugs is the closest budgetary equivalent of a free lunch.  Some 60% of American take prescription drugs every year, because they help relieve pain, improve the quality of their lives, and extend their lifespans. Almost all of us also complain about the cost of many of those drugs.  To better understand the tradeoff, I undertook a study of the costs and benefits of Medicare Part D, which guarantees access to Medicare-backed private coverage for prescriptions.  I reviewed scores of studies investigating the effectiveness and costs of prescription drugs.  Without prescription drugs, countless conditions would be treated instead with elaborate procedures and services, often requiring hospitalization.  The most extensive analysis found that each prescription filled or refilled by a Medicare beneficiary lowered those other healthcare costs by nearly $174 in 2014.

Based on surveys of how often older Americans fill prescriptions, I can estimate that the use of prescription drugs by the 23.4 million Americans people covered by Part D plans in 2014 saved the Medicare and taxpayers an astonishing $113.5 billion in 2014.  Since Medicare Part D cost taxpayers some $68 billion in 2014, this use of prescription drugs under Part D saved taxpayers nearly $70 billion, on a net basis, in 2014.  Include as well the 14.4 million beneficiaries with drug coverage through Medicare Part C Advantage plans, and the net savings for taxpayers came to more than $110 billion in 2014.

Memo to Paul Ryan and other GOP privatizers who want to replace Medicare with vouchers: Your misguided efforts to cut federal support for Part D and Part C will cost lives and drive up overall healthcare costs for seniors.  To read the report, click on, The Value of the Part D Program for Its Beneficiaries and the Medicare System.