Massachusetts Drug Plan Could Exceed Cost Estimates, PhRMA-funded Study Finds
Massachusetts' new subsidized drug insurance program for seniors, the Prescription Advantage Program, could cost as much as $508 million, a study conducted by professors at MIT's Sloan School of Management found. The Pharmaceutical Research and Manufacturers of America paid "up to $50,000" to fund the report, according to the Boston Herald. The Herald reports that state officials have estimated the program, slated to begin in April, will cost $100 million its first year. The program will replace the state's current prescription drug plan, which limits participation to low-income seniors. According to the MIT analysis, the plan "at a minimum" will cost about $75 million each year. But in the "unlikely event" that every eligible senior participates, the cost could be as high as $508 million. The study found "several factors" that could increase the cost of the program, including increased drug use, covering those without any existing drug insurance and a shortage of participants paying the "full" premium -- program fees are based on income and range from $0 to $1,000 per month. Out-of-pocket costs are capped at $2,000. The study also reviewed other options for obtaining discounted drugs, such as the creation of a state "buying pool" to include seniors, state employees and Medicare beneficiaries. Such a pool, however, could not achieve discounts greater than those already available in private plans, the report concluded (Powell, Boston Herald, 12/21).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.