10 Essential Facts About Medicare and Prescription Drug Spending

1. 50% 45% 45% 45% 46% 46% 45% 44% 43% 43% 44% 43% 43% 43% 43% 42% 42% 41% 41% 41% 41%
6% 5% 5% 5% 5% 5% 5% 5% 4%
4%
4% 4% 4%
4%
4% 4%
4%
4%
4%
4%
4%
25% 23% 22% 21% 19% 18% 17% 17% 16%
15%
14% 13% 13%
12%
12%
12%
12%
12%
12%
11%
11%
18% 9% 8% 8% 8% 8% 8% 8% 8%
9%
10% 10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
2% 18% 20% 21% 22% 23% 24% 26% 28%
28%
29% 30%
30%
31%
31%
32%
33%
33%
34%
34%
35%
$205
$224
$236 $241
$253 $253 $259 $259 $265
$298
$325
$341
$360
$387
$412
$438
$466
$496
$528
$561
$597
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Medicare
Medicaid
Out of pocket
Other payers
Private health insurance
SOURCE: Kaiser Family Foundation analysis of CMS National Health Expenditure Data for Historical (CY2005-2015) and Projected
(CY2016-2025) Retail Prescription Drug Expenditures.
Total U.S. prescription drug spending, in $ billions:
Actual Projected
Part D begins

2. SOURCE: MedPAC, June 2017 Report to the Congress, Chapter 2, “Medicare Part B Drug Payment Policy Issues,” and 2017 Annual
Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,
Tables III.D1 and V.B1.
Total Medicare Spending in 2015 = $647.6 billion
14%
3%
83%
Medicare Part D drug
spending
Medicare Part B drug
spending
Other Medicare
spending

3. SOURCE: Kaiser Family Foundation analysis of CMS Part D Drug Utilization and Cost Summary, Calendar Year 2015..
5.1%
3.2%
2.1% 1.7%
1.6%
1.6%
1.5% 1.5%
1.3%
1.2%
79.3%
Harvoni
Lantus/Lantus Solostar
Crestor
Advair Diskus
Spiriva
Januvia
Revlimid
Nexium
Lyrica
Humira/Humira Pen
All other drugs
Treatment for:
Hepatitis C
Diabetes
High cholesterol
Asthma
Asthma/COPD
Diabetes
Multiple myeloma
Acid reflux
Fibromyalgia/pain
Rheumatoid arthritis
Top 10 drugs:
Total Spending on Medicare Part D Prescription Drugs in 2015:
$137 billion

4. 8.6%
9.6%
10.4%
11.1% 11.3% 11.5% 11.7%
12.9%
14.3%
18.2%
22.0%
23.8%
0%
5%
10%
15%
20%
25%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
SOURCE: 2017 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical
Insurance Trust Funds, Table IV.B8.
Medicare Part D rebates as a percent of total drug costs:

5. 2.4%
4.4%
4.7%
Actual:
2007-2013
Actual:
2013-2016
Projected:
2016-2026
SOURCE: Kaiser Family Foundation analysis of Medicare spending data from the 2017 Annual Report of the Boards of Trustees of
the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table V.D1; 2017 Expanded and
Supplementary Tables and Figures.
Average annual growth in Medicare Part D per enrollee spending,
actual and projected:

6. 8% 8% 9% 11% 11% 11% 11% 13% 13% 13% 14% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%40% 36% 33% 33% 32% 30% 30% 28% 23% 21% 20% 16% 15% 15% 16% 16% 16% 16% 15% 15% 16%
34% 33% 34% 34% 34% 34% 33% 32% 30% 29% 29% 29% 29%
28%
28%
28%
28%
28%
28%
28%
28%
14% 16% 17% 17% 18% 21% 23% 26%
33%
37% 38% 40%
41%
41%
41%
41%
41%
41%
42%
42%
42%
$44
$50 $54 $58
$63 $66 $69 $73
$82
$90 $92 $94
$104
$115
$125
$135
$146
$157
$168
$180
$193
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Retiree drug subsidy
Reinsurance
Low-income subsidy
Direct subsidy
Premiums
SOURCE: 2017 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical
Insurance Trust Funds, Table IV.B10.
Annual Medicare Part D spending, in $ billions
Actual Projected

7. NOTE: SNF is skilled nursing facility. Analysis excludes beneficiaries enrolled in Medicare Advantage plans and those in Part A or
Part B only.
SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2013 Cost & Use file.
Average Out-of-Pocket Spending by Medicare Beneficiaries on Services in 2013:
$3,257
Long-term care
facility
34%
Medical
providers
23%
Prescription
drugs (Part D)
18%
Dental
9%
SNF & home health
8%
Outpatient hospital
5%
Inpatient hospital
3%

8. $498
$258
$1,123
$3,041
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Overall average Enrollees with drug
spending below the
coverage gap
Enrollees with drug
spending in the gap but
below catastrophic
threshold
Enrollees with spending
above the catastrophic
threshold
NOTE: Analysis includes enrollees in stand-alone prescription drug plans and Medicare Advantage drug plans; excludes enrollees
receiving Low-Income Subsidies. Out-of-pocket costs include Part D drug costs, but not Part D premiums or costs for Part B-covered
drugs.
SOURCE: Kaiser Family Foundation analysis of a five percent sample of 2015 Medicare prescription drug event claims from the CMS
Chronic Conditions Data Warehouse.
Average out-of-pocket costs by Medicare Part D enrollees not receiving
Low-Income Subsidies:

9. $3,854
$4,055
$4,367 $4,465
$3,004 $3,058
$2,789 $2,870
$3,041
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
NOTE: Analysis includes enrollees in stand-alone prescription drug plans and Medicare Advantage drug plans; excludes enrollees
receiving Low-Income Subsidies. Out-of-pocket costs include Part D drug costs, but not Part D premiums or costs for Part B-covered
drugs.
SOURCE: Kaiser Family Foundation analysis of a five percent sample of 2007-2015 Medicare prescription drug event claims from
the CMS Chronic Conditions Data Warehouse.
Average out-of-pocket spending by Medicare Part D enrollees with
out-of-pocket spending above the catastrophic coverage threshold:
Phase-out of
coverage
gap begins

10. NOTE: Items asked of separate half samples.
SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted April 17-23, 2017).
Allowing the federal government to negotiate with drug companies
to get a lower price on medications for people on Medicare
Making it easier for generic drugs to come to market in order to
increase competition and reduce costs
Requiring drug companies to release information to the public on how
they set their drug prices
Limiting the amount drug companies can charge for high-cost drugs for
illnesses like hepatitis or cancer
Creating an independent group that oversees the pricing of
prescription drugs
Allowing Americans to buy prescription drugs imported from Canada
Allowing Americans to buy prescription drugs from online
pharmacies based in Canada
Eliminating prescription drug advertisements
Encouraging people to buy lower-cost drugs by requiring them to pay a
higher share if they choose a similar, higher cost drug
DEM IND REP
96% 92% 92%
84% 91% 91%
84% 88% 84%
78% 79% 79%
74% 74% 71%
66% 77% 75%
73% 68% 59%
59% 59% 53%
40% 60% 57%
Percent who say they favor each of the following: