Prescription drug relief for Missouri’s seniors

Gov. Bob Holden has signed legislation approved during last month’s special session of the General Assembly that provides Missouri’s senior citizens with much-needed relief from escalating prescription drug costs.

Holden held ceremonial bill signing at the Missouri Press Association’s annual meeting at Lake of the Ozarks, at Bevo Community Center in St. Louis, and at the Holy Cross Senior Center in Kansas City. The new legislation replaces a pharmaceutical tax credit that was not providing real relief for Missouri’s low-income seniors with large prescription bills.

“Prescription drug cost relief for seniors was one of my main priorities in my first legislative session as governor,” Holden said. “This is why, when the relief was not approved by the General Assembly in the final days of the session, I called the members back to address the issue in special session. The need for help was so critical that our seniors could not wait another year.”

Under the bill, all seniors with a household income of less than $17,000 as an individual or $23,000 as a couple will be eligible for the program. Depending on their income, those enrolled cover the first $250 or $500 of their prescription drug expenses. Once that limit is reached, the state will pay 60% of prescription medication costs.

A commission will be appointed to oversee the program. Commission members will have the flexibility to expand the program as additional appropriations become available and to ensure that program costs remain within available resources.

“I believe that this fiscally responsible plan offers an important safety net for senior who are in the greatest need,” Holden said. “The passage of this new law is truly a victory for Missouri seniors.”

The Missouri Senior Rx Program

The Program by the Numbers

Income <$12,000 for an individual <$17,000 for an individual

<$17,000 for a couple <$23,000 for a couple

Enrollment Fee $25 per year $35 per year

Deducible $250 $500

Annual Benefit $5000 Limit $5000 Limit

Coinsurance 40% 40%

Eligible Seniors 287,820 94,830

Participants

FY 03 37,260 13,220

FY 04 57,310 20,330

Total State Program Cost – With 15% Rebates from Pharmaceutical Companies

FY 03 $46.7 – 53.7 million*

FY 04 $76.7 – 86.7 million*

*As estimated by William M. Mercer Companies, LLC

Why Our Seniors Need the Missouri Senior Rx Program

* 755,379 Missourians, roughly 13.5% of all state residents, are age 65 or older. This is expected to rise to over one million, or over 20%, by 2010 (Census 2000)

*Missouri ranks 14th among all states in the size of its elderly population. (Census 2000)

*National spending on drugs has tripled in the last decade, and is expected to double between 2001 and 2010, rising from $117 billion to $366 billion. (Kaiser Family Foundation)

*Americans 65 and older pay an average of $1,205 a year for prescription medications, up from $559 in 1992. This cost is estimated to rise to $2,810 by 2010. (Families USA)

*Individuals without prescription drug coverage typically pay an average of six times more for their generic medications, and three times as much for band name medications. (Medicaid and the Uninsured)

*Among ages 65-74, the average number of prescription medications per senior is over nine. (Testimony of PhRMA to the interim committee on Prescription Drugs, Dec. 6, 2000)

*Among seniors over 75, the average number of prescription medications per senior is over 11. (Testimony of PhRMA to the interim committee on Prescription Drugs, Dec. 6, 2000)

*Medicare beneficiaries without drug coverage averaged nearly eight fewer prescriptions per year than those with coverage. (Kaiser Family Foundation)

*Persons without drug coverage spent on average 68% more for their medications than did those without coverage, $546 vs. $325. Among those in poor health, the disparity in out of pocket spending rises even higher $820 vs. $490. (Kaiser Family Foundation)

*Average annual out-of-pocket spending for drugs among Medicare beneficiaries is estimated to be about $858. (Kaiser Family Foundation)

*27% of Medicare beneficiaries have annual out-of-pocket costs of over $1000. (Kaiser Family Foundation)