Targeting Medicare Drug Benefits: Costs and Issues

This report, written by Marilyn Moon and Matthew Storeygard of the Urban Institute, estimates the potential cost of targeting drug benefits to low-income Medicare beneficiaries and those with catastrophic drug expenses and discusses some of the key programmatic issues that could arise under this approach. The authors predict that a targeted and comprehensive drug benefit would likely help more than half of the 11.3 million low-income beneficiaries who lack drug coverage through Medicaid or an employer-sponsored plan. Covering this population and offering catastrophic protection to beneficiaries with extremely high out-of-pocket drug expenses would require an estimated $345 billion over ten years.