Maine and Missouri might not stand out as top retirement destinations, but new data suggests that older Americans should consider the pair since they provide the lowest costs of prescription drugs to residents.
The average Medicare recipient lays out over $7,500 for prescription drugs annually, according to MedicareGuide, which conducted the study, prompting almost two in three Americans age 65 and over to try to save on prescription drugs in the last year.
The findings come after Medicare's annual open enrollment period, which runs through December 7, started October 15.
The study “helps create awareness that there are significant differences” between locations, said Jeff Smedsrud, co-founder of HealthCare.com, the parent company of MedicareGuide.com.
“Anytime people are moving, they ought to think of all the factors that may affect their decision,” he told Yahoo Money. “There's more to consider than low taxes and how much sunshine there is.”
Using Medicare Part B and D metrics, the analysis looked at 13 measures categorized by cost, access, and quality, and ranked all 50 states and Washington, D.C. Here's a breakdown of the rankings.
Five cheapest states for prescription drug prices
Maine was the all-around winner for the cheapest prescription drug costs, but two other states in the top five stood out as metric leaders. Vermont (No. 4) was the best state for Part B drugs per capita actual costs and Missouri (No. 2) has the best average annual Part D drug deductible.
The five cheapest state to buy prescription drugs are Maine (No. 1); Missouri (No. 2); Kentucky (No. 3); Vermont (No. 4), and New Hampshire (No. 5).
Five most expensive states
Tennessee carries the distinction of being the priciest state for annual prescription drug price per capita, a negative factor that propelled it to be the nation's most expensive prescription drug state, according to the findings.
Following Tennessee (No. 51) on high costs is Utah (No. 50), Alabama (No. 49), Illinois (No. 48), and Nebraska (No. 47), the study found.
Reasons for state-by-state differences
While prescription drug costs are high across the country, prices vary markedly within states.
“[Medicare Part D prescription drug plan] prices vary depending on where you live, and even ZIP codes and counties sometimes can have variations,” Smedsrud pointed out. “It can be mind-bending that there's this many differences, and that makes it really hard for consumers.”
Case in point: the cost of a single fill of lidocaine 5% — a topical pain-reliever — ranges from $31 to $1,525, or an almost a 5,000% difference — using two different insurances in the same market during the same timeframe, the analysis found.
“Plans are designed to appeal to different demographics,” said Scott Lake, a pharmaceutical expert with Healthcare.com. “They target health and sick groups with varying lists of covered drugs, premiums and copays.”
The differentiation of state laws governing pharmaceuticals and their distribution, along with the cost of real estate can also shape drug prices, Lake explained. Experts also point to pharmacy and manufacturer rebates as another driver of the expansive pricing divide.
“States with lower education ratings, overall, tend to have higher out-of-pocket medical expenses,” Smedsrud noted. “It’s not a red state, blue state thing, but there are differences.”