HCM 340 Final Project
Jennifer Marshall
Southern New Hampshire University
February 20, 2022
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The rising cost of pharmaceuticals affects the aging population in many ways:
Original Medicare does not include a drug plan unless one is added, or a Medicare Advantage
plan is chosen. Even if drug coverage is available, many medications may be excluded from
plans and seniors are forced to pay out of pocket or talk to their doctors about using an
alternative drug that is covered by their drug plan. "Since outpatient prescription drug use is not
covered by Medicare, it is a major source of out-of-pocket expenditures for the elderly. By one
estimate, severely disabled elderly persons spend more than half their out-of-pocket health
expenditures on outpatient prescription drugs. What makes this financial burden all the more
daunting is that half the elderly population has no insurance coverage for prescription drugs"
(Rogowski, Lillard, Kington, 1999).
Many seniors take multiple medications to treat chronic health conditions such as heart
disease, high blood pressure, and diabetes and the high costs of those medications can add up
very quickly. This forces some seniors to forgo necessary medications, skip doses, or use an
over-the-counter alternative in an attempt to reduce their financial burden which could lead to
higher mortality and higher overall healthcare costs.
The rising cost of prescription drugs is not new. "Over the past 20 years, price increases
for brand-name drugs in Medicare Part D have risen at more than twice the rate of
inflation" (The Commonwealth Fund, 2021). Even for seniors who participate in a Medicare part
D plan, there has been a gap in coverage on prescription drugs since its inception known as the
"donut hole". This describes the stage in coverage between the plan's limits, $4130 in 2021, and
the stage where a beneficiary enters Catastrophic Coverage, $6550 in 2021. While in the gap,
beneficiaries pay 25% of their covered drug costs. Prior to the Affordable Care Act of 2010,
members were responsible for 100% of their prescription costs while in the gap, or "donut hole".
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Once a member enters Catastrophic coverage, they are only responsible for a small co-pay for
covered prescriptions (Humana, 2022)
Medicare recipients are typically retired individuals who are living on a fixed income.
According to the Kaiser Family Foundation, in 2016, half of all Medicare beneficiaries had
incomes below $26,200. With separate premiums for Medicare part D, deductibles of up to $455
before coverage begins, and some drugs not being covered by their plan, beneficiaries are being
asked to spend a sizeable portion of their limited income on prescription medications. This can
lead to poor compliance with medications resulting in increased healthcare costs due to
complications related to poor control of chronic illness (Kirzinger, Neuman, Cubanski, & Brodie.
2019).
Having to choose between the basic necessities of life: food, shelter and clothing is
difficult for anyone, but as a person ages, they are more likely to need prescription medications.
Because so many seniors are not able to affor