Prescription Drug Assistance: Programs and Financial Resources that Help the Elderly
Prescription drugs are a major component of the overall cost of caring for the elderly. By some reports, persons 65 and older spend an average of over 3% of their income on prescription drugs. That percentage is even higher when over-the-counter medications are included. While Medicare Part D pays for some medications for those enrolled in a plan, it is reported that over 65% of seniors’ prescription costs are out-of-pocket.
Fortunately there are many state, federal and other programs that can help the elderly lower their cost of medications. This webpage explores both the prescription drugs benefits of many commonly held insurance programs and non-insurance based assistance programs. One can browse the options discussed on this page or search for financial assistance for eldercare
Medicare and Prescription Drugs
Medicare is a federal health insurance program for persons aged 65 and older which is composed of multiple parts: Medicare Part A, Part B, Part C and Part D. Prescription drugs are covered by Medicare Part D. Part D plans are sold by private insurance companies either as a standalone plan known as a Medicare Prescription Drug Plan (or PDPs) or as part of a Medicare Advantage Plan (or MA-PDs) which groups Parts A, B and D coverage into a single plan. Medicare Part D’s contributions for 2012 are outlined in the table below. 2012 Medicare Part D Coverage and Donut Hole Limits
Medicare Extra Help
|Prescription Spending||Coverage Area||Individuals Responsibility|
|$0 - $320
||Seniors pay 100%
|$320 - $2930
||Seniors pay co-payments only
|$2930 - $4700
||Seniors pay 50%
|$4700 and over
||Seniors pay co-payments only
Extra Help is a program that provides additional financial assistance to seniors with limited resources to help pay for prescription drug costs. Seniors are eligible if their total assets (not including their home) are valued at less than approximately $13,070 for individuals or $26,120 for married couples. Learn more about Extra Help or apply online
State Pharmaceutical Assistance Programs (SPAP)
Medicaid and Prescriptions Drugs
Medicaid is a state run, health insurance program for low income and disabled individuals. The definition of “low income” changes by state but typically an individual must have an annual income of less than $20,000 and assets of less than $10,000. All 50 states and Washington DC’s Medicaid programs cover the majority of the cost of prescription drugs for participants. Program participants are usually required to make small co-payments (also referred to as share of cost) for their medications. Per prescription co-payments range from as low as $.50 per prescription to about $3.00. Some states have limitations on the number of brand name drug prescriptions they will cover per month or per year. This limit typically lies between 5-8 prescriptions per month. Read more about qualifying for Medicaid
and Medicaid Prescription Drug benefits
in your state.
Generic vs. Brand Name Drugs
When a pharmaceutical company releases a new drug, the US Food and Drug Administration allows that company to have a patent on the drug for several years. As the patent expires other pharmaceutical companies are allowed to copy the drug and sell generic versions of it. Generic versions are less expensive than brand names for two reasons. The manufacturers of generics do not shoulder the research and development costs and can therefore sell the drugs at a lower price and the increased competition further drives the cost down.
There is an ongoing and sometimes heated debate whether generic drugs are of lower quality. The final decision whether to use a brand name or generic drug should be up to the individual and their doctor. However, two things are certain. Generic drugs are pharmacologically the same as their brand name equivalents and generic drugs are considerably less expensive for the consumer. Most individuals are able to lower their out-of-pocket costs by between 25%-75% by using a generic instead of a brand name drug.
Mail Order and Online Pharmacies vs. Retail Pharmacies
The use of a mail order or online pharmacy can provide modest saving over a retail pharmacy. Often the cost of the medication is the same but the insurance company allows an individual to receive a greater quantity of their medication if they use a mail order pharmacy. For example, an individual might have a $20 co-pay for a 30 day supply of a medication filled at a retail pharmacy. They may be able to receive a 90 day supply by using a mail order pharmacy for the same $20 co-pay.
More than costs saving is the convenience of mail order pharmacies. Aside from not having to travel to the pharmacy, most mail order pharmacies will call the individual to remind them when it is time to refill a prescription or when a new prescription is required.
The rules for purchasing prescription drugs from Canadian pharmacies change with frequency and by state. Legal questions aside, there is no debate over the fact that some medications can be purchased online from Canadian pharmacies with ease and at significant cost savings. Savings for brand name drugs are higher than for generics. Typically consumers can save as much as 50% for the former and 25% for the latter. One can check the cost of medications at different Canadian and US pharmacies at this website that tracks medication costs
to see if using a Canadian pharmacy would benefit their family.
Pharmaceutical Company Patient Assistance Programs (PAPs)
Patient Assistance Programs, or PAPs for short, are programs run by nearly all the major pharmaceutical companies in which assistance is offered to low income individuals by providing them with reduced cost or free medications. These programs are typically open to both individuals with insurance and those that do not have insurance although sometimes the pharmaceutical companies maintain two different programs for these groups.
To participate in a PAP, applicants are usually required to show proof of income, their doctor’s prescription for the required medication and documentation of any insurance coverage they have. Learn more about Patient Assistance Programs and find links to major pharmaceutical company programs
Tax Deduction for Prescription Drugs
The out-of-pocket costs paid for prescription drugs are considered tax deductible under the Medical and Dental Expense Tax Deduction. In order for this deduction to be relevant to an individual tax filer, the total sum of their medical and dental expenses must be greater than 7.5% of their adjusted gross income. Fortunately for seniors, the range of items and services that can be considered a medical or dental expense is quite broad and because most seniors have fixed incomes, it is quite common for their expenses to exceed 7.5% of their adjusted gross incomes. In addition to our analysis of the medical and dental expenses tax deduction
, one can read the IRS’ webpage
on the subject. It is worth noting that over-the-counter medications are not considered tax deductible.
Prescription Savings Cards
Prescription Drug Coupons
Many pharmaceutical companies make discount coupons available online for their brand name drugs. Often these coupons will discount the cost of a brand name drug so that it equals the cost of the generic version. One can search for drug coupons by medication name here
. Most coupons can simply be printed from a webpage and brought to the pharmacist. Be wary of any website that asks you to pay to receive the discount coupon and any websites that request excessive personal information to provide you with the discount coupon.