A new study from the Kaiser Family Foundation suggests that most seniors are paying too much for their prescription drugs. An MIT researcher analyzed prescription drug records from Medicare Plan D participants from January 2005 to December 2006, and found that only six to nine percent of enrollees chose the lowest cost plan available to them, based on their actual prescription drug use in 2006.

The majority of seniors spent an average of $360 to $520 more on their prescription drugs in 2006, and some spent as much as $1,360 more than they would have with the lowest-cost plan. The study acknowledges that some participants might be paying more for specific reasons, such as a strong brand name or for a convenient pharmacy. But the sheer number of plans available can make it difficult for consumers to make the most cost-effective decision. According to the study, counties across the U.S. offered between 27 and 70 different plans in 2006, the year analyzed. “The findings of this analysis suggest that choice across such a wide range of Part D plan options may not be in the best interest of beneficiaries who are looking to maximize their savings,” the author concludes.

Open enrollment for Plan D doesn’t begin until November—see our guide for 2009—but it’s always a good time to keep track of what your spending and looking for ways to save. A recent analysis by the Consumer Reports Best Buy Drugs team found that Part D enrollees who need to take medicines in 2009 for high cholesterol, high blood pressure, heart disease, diabetes, or arthritis (or for a combination of those ailments) could save between a few hundred dollars and more than $5,000 per year by switching to lower-cost medicines.

—Kevin McCarthy, associate editor

Read the PrescriptionforChange.org blog on this study, and see Consumers Union's report on the high costs, gaps, and instability of the Medicare Part D drug benefit. And visit Consumer Reports Best Buy Drugs to compare drugs based on safety, effectiveness, and value, and be sure to check out our Money Saving Guides.