How Big Is the Government Subsidy for Medicare Part D?

The brief’s key findings are:

• Medicare Part D provides access to prescription drug coverage for seniors and reduces their cost burden by subsidizing premiums and contributing to cost-sharing.
• The question is, how large is the lifetime subsidy for a typical 65-year-old?
• 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.
• This amount is large relative to the retirement saving of retirees, underscoring Part D’s substantial impact on the well-being of older Americans.