As of 2007, Medicare helps pay for outpatient prescription drugs. Medicare provides additional help with drug costs to beneficiaries who qualify based on low incomes and limited resources. The information below describes the different levels of assistance available to people who meet the eligibility requirements.

People on Medicare Who Also Have Full Medicaid Benefits (Dual Eligibles) pay:

• No premium
• No deductible
• Copayments as follows:
• • Nursing home residents: No copayments
  • Individuals below poverty level: $1/generic; $3.10/brand name drug
  • Individuals above poverty level: $2.15 per generic; $5.35/brand name drug 
• No copayments after individual spends $3,850 out-of-pocket on their prescription drugs

People on Medicare with Incomes Below 135% of Poverty (about $13,000/individual; 17,000/couple) and Resources Below $6,120 per individual/$9,190 per couple pay:

• No premium
• No deductible
• Copayments of $2.15/generic and $5.35/brand name drug
• No copayments after individual spends $3,850 out-of-pocket on their prescription drugs

People on Medicare with Incomes Below 150% of Poverty (about $14,000/individual; $19,000/couple) and Resources Below $10,210 per individual/$20,410 per couple pay:

• Sliding-scale premium
• $53 deductible
• 15% coinsurance up to $5,451 in total drug spending (= $3,850 out-of-pocket drug spending)
• Copayments of $2.15/generic; $5.35/brand name drug after individual spends $3,850 out-of-pocket on their prescription drugs

NOTE: Resources are generally defined as assets that can be converted to cash within 20 days, such as stocks, bonds, checking, savings, and retirement accounts. A subsidy applicant's principal home, car, and burial space do not count toward the resource limit.  The resource limits can be slightly higher (an additional $1,500 per person) if individuals intend to use some savings for burial expenses.