Final answer:
Prescription drug costs have a major impact on consumer healthcare costs, with government programs such as Medicare's prescription benefit illustrating how subsidies increase overall healthcare expenditure and can influence drug pricing. Political lobbying by organizations like AARP also contributes to spending patterns and coverage levels.
Step-by-step explanation:
Prescription drug costs significantly influence the overall cost of consumer healthcare. For instance, the expansion of Medicare in 2003 included a prescription drug benefit, which initially cost the federal government about $40 billion in 2006. Costs were projected to rise to $121 billion by 2016 due to increased enrollment and drug prices. Medicare beneficiaries pay an annual premium and deductible, after which the government covers 75% of their prescription drug costs up to a certain threshold. The addition of prescription drug benefits to Medicare illustrates how government policies to subsidize drug costs can have a sizable impact on healthcare expenditure. This can alleviate the financial burden on individuals, especially the elderly and disabled, who often need multiple medications. However, these programs also contribute to the rising overall healthcare costs that must be managed by the government and can have an inflationary impact on drug pricing. Furthermore, organizations such as the American Association for Retired People (AARP) exert political pressure to enhance benefits for their members, which can lead to increased spending on prescription drugs for groups with organized lobbying efforts, sometimes at the expense of those without such representation, such as the uninsured.