Estimates the expected increase in urban and rural Medicare beneficiaries eligible for drug coverage under three current Medicare prescription drug proposals. Also gives an estimate of the urban and rural per capita federal payments for drug coverage under the three proposals. Finds that total dollar impact of the three proposals is driven by their generosity. The costliest offers the greatest taxpayer-funded benefits. Per dollar of spending, the urban/rural division of federal drug outlays differs across the proposals. The Administration proposal would result in much higher per-capita federal drug spending in rural areas than urban ones. Congressional Republican and Democratic proposals show smaller rural-urban differences. Concludes that higher poverty and lower current drug coverage in rural areas affect projected spending under Medicare drug proposals. Per dollar of spending, the Administration's proposal to focus spending on near-poor without current coverage strongly favors rural areas. Congressional Democratic and Republican proposals subsidize coverage for all, including those currently with and without coverage. The urban-rural split of federal spending under those proposals depends on the extent to which the currently uninsured are willing to take up the newly offered benefit. Report available by contacting the Center.