Medicare:

Prescription Drug Issues

PEMD-87-20: Published: Jul 16, 1987. Publicly Released: Aug 14, 1987.

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In response to a congressional request, GAO provided information about prescription drugs as they relate to the needs of the elderly.

GAO found that: (1) more than 75 percent of persons older than 65 in the United States use prescription drugs; (2) 90 percent of the elderly who are chronically ill use prescription drugs; (3) persons 65 and older use 30 percent of all the prescription drugs used in the United States, at a rate approximately three times that of the remainder of the population; (4) for three out of four elderly persons, prescription drugs are the largest out-of-pocket health care expense; (5) drug expenditures for persons 65 and older are estimated at $9 billion annually, $7.3 billion of which is out-of-pocket; (6) from January 1980 through 1986, the cost of prescription drugs rose about 80 percent, or 250 percent faster than the rise in consumer prices in general; and (7) 15.5 percent of the elderly patients who require prescriptions are reportedly unable to pay for them. GAO also found that: (1) Medicare generally covers inpatient drugs, but pays for outpatient drugs in only a few instances; (2) 22 of the 48 states with a prescription drug program under Medicaid charge recipient copayments, which range from $0.50 to $3.00; (3) only nine states offer specific programs covering some drug benefits for eligible residents; and (4) Congress has proposed legislation which would reduce out-of-pocket expenditures for Medicare beneficiaries and require states to extend Medicaid coverage to elderly persons who are below the federal poverty level.

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