Pharmacy costs are skyrocketing and showing no signs of abating. Meanwhile, access to prescription medicines has become a hot political issue as seniors especially worry about the costs. As a result, both Republicans and Democrats are proposing a number of new Medicare drug plans. While many working age private health insurance plans cover both inpatient and outpatient drug costs, Medicare only covers hospital drug expenses, leaving outpatient costs to the senior. Some seniors get this coverage as part of their private Medicare supplement plans.
Most seniors have no outpatient drug coverage.
For consumers, young and old, who have drug coverage, pharmacy costs are the leading driver in the recent significant increase in the cost of insurance. While overall health insurance costs for non-seniors are rising at 8 percent to 12 percent a year in many health plans, the prescription drug cost component of these plans is rising 17 percent to 20 percent per year. In 1997, almost as many dollars were spent on drug costs as on nursing home costs. Much of the drug cost increase is being driven by utilization. The number of prescriptions filled in the United States grew by 40 percent between 1992 and 1998.