Medicare Rx Winners and Losers: Four Examples

What will the new Medicare drug benefit mean to beneficiaries in different circumstances? Here's how four people, with no coverage now, would fare:

Wendy, who opposes the new law, believed the drug benefit would not help her. But it will. Her income is $8,000 a year—too high to qualify for Medicaid in Maryland, where she lives in subsidized housing. The drugs she needs (two generics, three brand names) would cost $3,600 a year, if she could afford them. Under the full low-income subsidy, she'd pay $228 a year, with no other out-of-pocket expenses.

Melvin, in Georgia, has a variety of ailments including heart and thyroid problems, high cholesterol and depression. His drugs keep him in good health but the costs, $8,116 a year, are a strain. The benefit would almost halve his costs—he'd pay $4,171 out of pocket but save $3,945 overall.

Marie and Evan, a middle-income couple, live in California. Their drugs cost $6,810 a year—$1,960 for her, $4,850 for him. Under the drug benefit Marie would save 44 percent, but Evan, with much higher costs, would save only 22 percent. That's because he'd fall partly into the coverage gap. Together, the couple would pay $4,868 out of pocket and save $1,942.

Walter, in New York, can't afford the $600 a month his cancer drugs cost at a local pharmacy. So he gets them by mail from Canada for $286 including shipping. With total costs of $7,200 a year, he'd qualify for some catastrophic help under the new law, saving $3,075 overall. But he'd still save $693 more a year by buying from Canada.