As prescription drug coverage options for older Americans become increasingly limited and expensive, a new national poll released by AARP this week found that 80 percent of Americans age 45 and over favor making prescription drug coverage part of Medicare. The same percentage (80 percent) says it should be a priority of the President and Congress.

The AARP poll examined perceptions of Medicare drug coverage and gauged reactions to possible levels of monthly premiums.

AARP CEO Bill Novelli said, "Beneficiaries don't expect free drugs. They know they will have to pay for a drug benefit in the form of premiums, co-pays, and deductibles. Creating a successful voluntary Medicare drug benefit will depend on whether the coverage is affordable and is seen as having real consumer value."

Last year Congress earmarked $300 billion for a Medicare drug benefit. AARP told members of the Senate Finance Committee this week that even if the $300 billion were increased to $350 billion to adjust for inflation and the added number of beneficiaries now in the program, it would probably not be enough. Novelli said, "At that level, monthly premiums are estimated to cost around $50, which is more than most beneficiaries can afford and would be willing to pay."

Even a somewhat lower premium may not attract enough enrollees to be a viable program. The AARP poll found that only a third of those 65 and older would be likely to purchase a plan with a $35 monthly premium, 50 percent coinsurance, a $200 deductible, and a $4,000 catastrophic coverage cap.

Based on this and earlier research, AARP is asking Congress to add to the $350 billion level by creating a reserve with an amount roughly equal to the estimated ten-year surplus in the Medicare Trust Fund—about $400 billion. This could be tapped as needed to provide flexibility for Congress to design a plan with drug coverage and program reforms that people would be willing to purchase.

Novelli told the Finance Committee that "good public policy, not just budget targets," should drive the funding of a prescription drug benefit. To create a plan that Americans perceive as having real value, AARP has offered assistance to members of Congress to test proposals with AARP members to devise a program that beneficiaries will buy today and will be sustainable in the future.

The data used in the AARP report were collected by Reed Haldy McIntosh through an omnibus survey of 885 respondents conducted March 1-3, 2002. The margin of error is +/- 3.5 percent.

AARP is a nonprofit, nonpartisan membership organization for people 50 and over. It provides information and resources; advocates on legislative, consumer, and legal issues; assists members to serve their communities; and offers a wide range of unique benefits, special products, and services for its members. These benefits include AARP Webplace at http://www.aarp.org/, Modern Maturity and My Generation magazines, and the monthly AARP Bulletin. Active in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP celebrates the attitude that age is just a number and life is what you make it.

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