By Marlene Y. Satter
A new AARP study showing retail prescription prices have increased six times faster than the general inflation rate since 2006 underscores the possibility that the Government Accountability Office may be seriously underestimating how much health care is costing retirees
The AARP study also found that the average annual cost of therapy for one prescription drug totals more than $11,000, which equals a whopping 75 percent of the average annual social security benefit.
A commentary from retirement health care cost modeling provider HealthView said that, in addition to underestimating how much retirees pay for health care premiums, the GAO study failed to take into account health care inflation — and the AARP study certainly appears to back that up.
Among other AARP findings were numerous other disturbing facts, which were based on the retail prices of 227 brand name, 115 specialty, and 280 generic prescription drugs in 2013.
The average annual increase in retail prices for widely-used prescription drugs
was 9.4 percent, compared with a general inflation rate of 1.5 percent. The average annual cost for therapy with that hugely expensive prescription drug mentioned above came in at an alarming $11,341. Not only would this account for three-quarters of an average annual Social Security benefit, it also amounted to nearly half of the median income for Medicare beneficiaries ($23,500), and more than one-fifth of the median U.S. household income ($52,250) over the same time period.
Brand-name drugs increased, on average, by 12.9 percent. Specialty drugs weren’t much better, rising by an average of 10.6 percent annually, while generic drugs — supposed to save everyone money — still increased an average of 4 percent per year.
“Unfortunately, it’s becoming clear that we can no longer rely on decreases in generic drug prices to offset unrelenting price increases for brand name and specialty drugs,” Leigh Purvis, MPA, AARP PPI director of health services research and coauthor of the new report, said in a statement. Purvis added, “This shift has serious implications for older adults and the entire health care system.”
Originally posted on BenefitsPro.com