Your Taxes at Work: Prescription Drugs

Thanks to Medicare Part D, the prescription drug plan that took effect in 2006, the out-of-pocket spending of elderly Americans on prescription drugs has plummeted.

In 2009 (the latest data available and recently released), a nearly universal 91 percent of Americans aged 65 or older bought prescription drugs. Those drugs cost a median of $1,290, slightly less than their $1,336 cost in 2005 (not adjusted for inflation). But in 2009, older Americans had to pay only 23 percent of that cost out-of-pocket, just half of the 46 percent they had to pay out-of-pocket in 2005. They have you, the taxpayers, to thank.

Source: Medical Expenditure Panel Survey, Household Component Summary Data Tables, 2009 Expenditures Per Person by Health Care Service