Assessing Medicare prescription drug plans in four states: balancing cost and access

Success of the Medicare prescription drug benefit depends on private organizations offering beneficiaries appropriate access to medications while controlling costs. There is limited guidance, however, as to what constitutes best practice in benefit and formulary design. This issue brief examines Medicare stand-alone prescription drug plans in the four most populous Medicare states-California, Florida, New York, and Texas. While there are similar offerings in all four states, there is wide variation in the amount of drugs covered, how drugs are accessed by beneficiaries, and prior authorization requirements. Plans with lower premiums are more likely to have additional formulary tiers and no coverage in the "doughnut hole"-the gap faced by many beneficiaries between $2,250 and $5,100 in costs. Given the many choices facing beneficiaries, the Centers for Medicare and Medicaid Services should monitor experiences to determine whether plans are meeting the needs of Medicare beneficiaries, particularly the frail and disabled.