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Prescription Costs Putting Squeeze on Seniors

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For many seniors on Medicare, if a physician writes up a prescription it could be the straw that breaks an individual's piggy bank.

While the physician's visit and laboratory tests may be covered by Medicare, the prescriptions a doctor writes up are usually not directly covered. With the high cost of medication, just one or two prescriptions could create a bad financial situation for seniors who don't have supplemental health plans. For most people on Medicare, a private supplemental insurance plan is needed to pay for these prescriptions. Of course, not all seniors can afford that luxury. That is why prescription drug coverage for Medicare recipients was such a hot topic of debate among presidential candidates in 2000.

For seniors on traditional Medicare plans living on a fixed income, they may be forced to choose between paying for a prescription and paying for food. Because the number of seniors will continue to rise in the coming years, especially when the Baby Boomers begin entering their Golden Years, prescription drug coverage has become a hot issue among people of all ages.

In April, President George W. Bush released his proposed budget for 2002 and highlights on the impact from the budget on seniors programs are available online at the National Council on Aging http://www.ncoa.org. The budget proposes cutting funds being allocated for the Older Americans Act, an increase for the National Institute on Aging and earmarks funds to go toward Medicare prescription drug coverage.

According to the NCOA report, the $153 billion being allocated for Medicare prescription drug coverage over a 10-year period falls short of what is needed. NCOA put that number into perspective by comparing it with federal employee health benefit plans. Under that plan, the cost needed would be $800 billion over 10 years. As the senior population continues to rise, the need for this prescription drug coverage will grow which will cause the number to swell even more so the plan can't be based upon current numbers to begin with.

When the United States Senate debated that section of the budget proposal last month, committee members voted to increase that $153 billion allocation to $300 billion. While it may provide an increase, it still falls short of what NCOA believes is needed. The House has approved the original allocation of $153 billion. Even if the amount increases when the budget is approved in its final form, there is concern that the increase will come out of another Medicare Part A Trust Fund. That fund may have an impact on a program set up for the retirement of baby boomers. The Senate rejected a plan proposed by one senator to increase spending on prescription drugs up to $311 billion by reducing the size of the tax cut.