Prescription Drug Coverage for Medicare Beneficiaries: Medicaid and State Pharmaceutical Assistance Programs

Publication Date: June 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

Medicare is the nation's health insurance program for 40 million elderly and disabled individuals. It provides beneficiaries with significant coverage for many health care services. However, it provides a very limited outpatient prescription drug benefit. Most beneficiaries (almost 90%) have private or public supplemental coverage to close the gaps in Medicare's coverage. However, in 1999, only 62.3% of beneficiaries had coverage for outpatient prescription drugs, primarily through employer-sponsored plans, Medicare managed care plans, and Medigap plans.

Approximately 13% of all beneficiaries are eligible for prescription drug coverage under programs run at the state level, through Medicaid and state pharmaceutical assistance programs. These are primarily individuals who are lowincome or who have large medical expenses that deplete their income and assets.

Eligibility criteria for Medicaid and state pharmaceutical programs vary widely among the states. Medicaid has numerous pathways through which Medicare beneficiaries can qualify for coverage of their prescription drug costs. This report describes the standards used by each state in determining eligibility. In addition, 20 states currently operate pharmaceutical assistance programs that provide subsidies to qualified individuals, usually the low-income elderly or disabled. This report describes the eligibility criteria and benefits under each program. The report will be updated as new data become available.