States may save $ billions if a prescription drug benefit is added to Medicare

Nearly half of all Medicaid expenditure on prescription drugs is for Medicaid beneficiaries who are also eligible for Medicare (dual beneficiaries). A Commonwealth Fund study estimates that dual beneficiaries accounted for $16 billion or nearly half of the estimated $ 33 billion in Medicaid spending on prescription drugs in 2002. The state share of drug spending on dual eligible beneficiaries is estimated to be $7 billion.

A prescription drug benefit could provide substantial financial relief to states facing budget shortfalls and could help avoid decreased Medicaid eligibility or other Medicaid program access limits as states struggle to balance their budgets.