More recently, members, at both the state and local levels, have experienced increases in their insurance copayments or premiums due, they are told, to the rising cost of prescription drugs. For example, one only has to refer to our recent July Voice stories on the controversy over the three-tier program, established by the state's Group Insurance Commission (see updated article here) and the Berkshire Health Group.

These developments in Mass are representative of a much larger - in this case, national - problem. There's no dispute that prescription drug costs have risen and will continue to do so.

According to the federal Health Care Financing Administration (HCFA), which administers the Medicare program, prescription drug spending has increased every year since '93, reaching 15.4% in 1998. HCFA projects that spending will continue to increase at double-digit rates through 2005, ranging from 12.9% to 10.2%.

Statistics, from the US Department of Labor, show that in 1998 and 1999 the inflation rate for prescription drugs ranked the highest among the major consumer categories (i.e., housing, food and medical care). In 1999 the prescription drug inflation rate was 5.7%.

More ominous, among the studies on this issue - with perhaps a more direct impact on our members - is the 1999 Drug Trend Report, released by Express Scripts this past June. Express Scripts is not only the pharmacy benefits manager for the state Group Insurance Commission (GIC) but also for a number of municipal plans, most notably the MIIA Health Benefits Trust (see article, p. 11) under which retirees and survivors from 65 towns receive their health insurance and drug benefits.

According to Express Scripts, the "bottom line" is that prescription expenditures grew at a significant rate in 1999 - a whopping 17.4% - which continues a trend of increasing rates seen since 1993 when the company began monitoring drug trends. Unfortunately, they see no end to that trend, with drug costs projected at an even higher rate of 17.6% this year, before gradually slowing to an annual 12.1% growth rate in 2004.

"Sources indicate to us that this trend report is held in high regard by those in the health insurance business and Express Scripts' clients, which now includes the GIC and MIIA," comments Insurance Coordinator Cheryl Stillman. "It's ominous because projections like this will place enormous pressure on the GIC, MIIA and other government units to at least curb the rate of prescription drug growth in the future."

Work To Contain Potential Increases

As we've done in the past, the Association will continue its efforts to contain any shift of increasing drug costs upon retirees and survivors. "If anyone compares changes in our plans with those in the private sector over the past few years, it's obvious we've been successful in containing costs," states Stillman.

Notwithstanding our efforts here in Mass, there's no dispute that retirees, as a whole nationally, continue to feel the main brunt of these cost increases. While comprising about 13% of the national population, retirees pay 42% of prescription drug expenses. Today retirees fill 29 prescriptions on the average, projected at 39 scripts by 2010.

Consequently, retirees now pay a national average of $1,205 for their prescriptions, increasing to $2,810 in 10 years, according to certain studies. Since 2 out of every 3 retirees in this county have no insurance coverage for prescription drugs, the calls for relief have been mounting with the focus on Washington.

Both the Democrats and Republicans have put forward their proposals for financial help to retirees. Not surprisingly they take divergent paths.

President Clinton called for a new Medicare Part D for prescription drug coverage. House Republicans countered his proposal with their own bill which would essentially provide government subsidies to private insurance companies offering drug benefits to retirees. At press time, the US Senate Finance Committee is working on a compromise measure.