The new Medicare Drug Benefit: Much ado About Little?

After many years of debate, Congress recently approved a new, voluntary “Medicare Part D” benefit that provides some coverage for prescription drugs. The goal of this coverage is to reduce financial barriers that might prevent beneficiaries from obtaining needed drugs. The degree to which this goal is achieved depends on how well the benefit reaches seniors with previously unmet needs; conversely, it may do little to improve seniors’ health if it replaces existing sources of coverage, or encourages overuse of drugs. This Issue Brief reviews data on current patterns of drug spending among Medicare beneficiaries and summarizes aspects of the new benefit. It explores the likely effect of the coverage on overall use of and spending for prescription drugs and considers whether any additional use is likely to represent needed care that had been forgone because of a cost barrier.