More observations on the Medicare drug benefit:

Here is a chart that shows who is paying what - as a percentage - for a range of drug costs (note: even if your costs are zero, you will be paying a base amount [the premium of $420].)



Also, the way the plan is structured, if your drug costs are less than $830/yr ($70/mo), you are paying more than you would if there were no drug plan. (In other words, only at that point do Medicare payments equal- and therefore pay back - the annual premium.)

Another question that needs to be answered is, "What's the distribution of drug costs today?" We doubt very much that there are significant numbers of people with annual drug costs over $5,000 (or $400/mo). But maybe there are. Also, what's with the region between $2,200 and $4,600 ($183/mo and $383). Do a lot of people inhabit this regiion? (If the costs fall into what's known as a normal distribution, then there will be a peak somewhere - perhaps in that range of costs.)

UPDATE: Our question has been answered! Thanks to reader Joe, we learn of a study by the Commonwealth Fund. On slide 40 of the pdf file, we see:

About 25% of Medicare beneficiaries pay between $2,000 and $4,500 - which nearly coincides with the $2,200 - $4,600 region where the proposed Medicare plan provides no additional drug coverage.

ANOTHER UPDATE: The New Republic Online has a good description of some of the features of the bill.

posted by Quiddity at 11/20/2003 01:51:00 AM