How big is the government subsidy for Medicare Part D?

Abstract

The brief's key findings are: (1) Medicare Part D provides access to prescription drug coverage for seniors and reduces their cost burden by subsidizing premiums and contributing to cost-sharing. (2) The question is, how large is the lifetime subsidy for a typical 65-year-old? (3) The analysis estimates a lifetime subsidy of about $20,000 to $60,000 per person, depending on life expectancy, interest rates, and expected drug spending. (4) This amount is large relative to the retirement saving of retirees, underscoring Part D’s substantial impact on the well-being of older Americans.