Medicare Drug Plans Often Not the Bargain Some Expect

But he couldn't be sure he wouldn't need it someday, and didn't want to pay the financial penalties for missing the May 15 deadline for sign-ups. So he enrolled in a plan with a $278 annual premium and no deductible, hoping for immediate discounts.

When Brower, 77, plunked his official card on the counter at Costco to pick up his regular prescription, however, he got some disturbing news: His monthly supply of blood pressure medication would cost less if he didn't use his Medicare plan.

The plan allowed him a maximum of 30 pills for $1.32 each. Without it, he could get 100 pills for $1.13 apiece.

Medicare Part D "doesn't save anything," grumbled Brower, who is no longer using the Medicare plan.

Some other seniors -- generally reasonably healthy, middle-class people who do not take a lot of costly drugs -- are coming to a similar realization: When premiums, co-payments, coverage gaps and other costs are figured in, the Medicare plans' drug prices are sometimes little better, and sometimes worse, than those offered at low-margin pharmacies.

The finding has been borne out in a handful of surveys around the nation by program critics. For instance, a review by the Senior Action Network, a grass-roots advocacy group in San Francisco, found that Costco's prices on the top 100 drugs used by Medicare beat prices of all 48 plans in California in more than half the cases.

"Seniors still ask, 'How come the drugs cost more with insurance than if I just go to Costco and buy them?' " said David Grant, the network's health policy director. " 'Why is it better to pay more and get less?' "

Some seniors are irked by other restrictions surfacing in the plans, including higher-than-expected co-payments, sudden price hikes, quantity limitations and requirements to try generic drugs before moving on to the higher-priced brands.

Officials at the U.S. Centers for Medicare and Medicaid Services, which runs the federal Medicare health program for the elderly and disabled, say that millions of new enrollees are saving money. In addition, they say, the plans' value can't be measured strictly by toting up individual prescription prices, but also must factor in the insurance coverage against future illness or injury.