Brower and his wife, Tamar, knew they couldn't get corporate-style coverage, but they avidly sought the best deal. The Corona del Mar couple are reasonably healthy and active, with a combined prescription drug bill of $3,100 last year.
They called various plans to inquire about charges for the specific drugs they needed, but no one would tell them, they said. So they settled on the AARP-endorsed plan, partly because it carried the name of an organization they knew.
So far, they say, it hasn't proved such a great bargain. Martin Brower is back to buying his medications the old way, at Costco, sans Medicare.
His wife fared better -- at least in the short term.
In March, for instance, she saved $58 on four prescriptions ($35, if the monthly premium is subtracted ) using the AARP-endorsed plan, paying $117 compared with $175 she would have paid at Costco without using her Medicare plan.
But her savings were hardly as dramatic as she had hoped -- nowhere close to 75% off the Costco price. And should her prescription costs rise somewhat, her savings could be wiped out. If she spends more than $2,250 a year, she lands in the so-called "doughnut hole," wherein she would be fully responsible for the plan's list price for the drugs (more than $200 a month). Under most plans, the gap in coverage lasts until a senior has spent up to $5,100.
A study last year sponsored by the Commonwealth Fund, a nonprofit, nonpartisan foundation, predicted about 38% of enrollees would fall into this gap in any given year.
After expenditures of $5,100 or more, enrollees must pay just 5% of the costs of covered drugs. But the Commonwealth Fund-sponsored study found that just 14% of enrollees are expected to need catastrophic coverage in any year.
A variety of surveys, though small, have suggested that better discounts overall are available outside of Medicare, at outlets such as Costco, Drugstore.com, and particularly in government programs operated by the Department of Veterans Affairs and Medicaid, which negotiate volume discounts.
A comparison by the Democratic staff of the House Committee on Government Reform found that in January, 10 leading Medicare drug plans were charging prices for 10 top brand-name drugs that averaged 2% more than at Costco in Los Feliz, 4% more than at Drugstore.com, 61% more than in Canada (which caps prescription prices) and 78% more than the other federal programs.
