Medicare Part D
Encyclopedia
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
the costs of prescription drug
Prescription drug
A prescription medication is a licensed medicine that is regulated by legislation to require a medical prescription before it can be obtained. The term is used to distinguish it from over-the-counter drugs which can be obtained without a prescription...
s for Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
beneficiaries in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act
Medicare Prescription Drug, Improvement, and Modernization Act
The Medicare Prescription Drug, Improvement, and Modernization Act is a federal law of the United States, enacted in 2003. It produced the largest overhaul of Medicare in the public health program's 38-year history.The MMA was signed by President George W...
of 2003 (MMA) and went into effect on January 1, 2006.
Eligibility and enrollment
Individuals are eligible for prescription drug coverage under a Part D plan if they are entitled to benefits under Medicare Part A and/or enrolled in Part B. Beneficiaries can obtain the Part D drug benefit through two types of private plans: they can join a Prescription Drug Plan (PDP) for drug coverage only or they can join a Medicare Advantage plan (MA) that covers both medical services and prescription drugs (MA-PD). The latter type of plan is actually part of Medicare Part C and has several other differences relative to original Medicare. About two-thirds of Part D beneficiaries are enrolled in a PDP option. Not all drugs will be covered at the same level, giving participants incentives to choose certain drugs over others. This is often implemented via a system of tiered formularies in which lower-cost drugs are assigned to lower tiers and thus are easier to prescribe or cheaper.Dual eligibles
Medicare dual eligible
Medicare dual eligibles, in the Medicare system of the United States, are Medicare Part A and/or B recipients who either [1] qualify for a Medicare Savings Programs or [2] qualify for Medicaid benefits. Dual eligibles generally qualify for the QMB benefits, in which the beneficiary's non-Medicare...
(those also eligible for Medicaid benefits) were transferred from Medicaid prescription drug coverage to a Medicare Part D plan on January 1, 2006. They are automatically enrolled in one of the less expensive PDPs in their area, chosen at random. If the dual-eligible person is already enrolled in an MA-PD plan, then they are automatically removed from the MA plan upon enrollment in a PDP.
Most Medicare beneficiaries must affirmatively enroll in a Part D plan to participate. Annual enrollment periods last from November 15 to December 31 of the prior plan year. This changes in 2011, when the enrollment period will last from October 15 to December 7. Medicare beneficiaries who were eligible but did not enroll during the enrollment period must pay a late-enrollment penalty (LEP) to receive Part D benefits. This penalty is equal to 1% the national average premium times the number of full calender months that they were eligible but not enrolled in Part D. The penalty raises the premium of Part D for beneficiaries, when and if they should elect coverage.
Enrollment in Part D as of April 2010 was 27.6 million beneficiaries. In 2010, there were 1,576 stand-alone Part D plans available, down from 1,689 plans in 2009. The number of available plans varied by region. The lowest was 41 (Alaska & Hawaii) and the highest was 55 (Pennsylvania & West Virginia). This allows participants to choose a plan that best meets their individual needs. Plans are required to offer the "standard" benefit or one actuarially equivalent, or they may offer more generous benefits. Medicare has made available an interactive online tool called the Medicare Plan Finder that allows for comparison of coverage and costs for all plans in a geographic area. The tool allows one to enter a list of medications along with pharmacy preferences. It can show the beneficiary's total annual costs for each plan along with a detailed breakdown of the plans' monthly premiums, deductibles, and prices for each drug during each phase of the benefit design. Plans are required to update this site with current prices and formulary information every other week throughout the year.
Beneficiary cost sharing (deductibles, coinsurance, etc.)
The MMA establishes a standard drug benefit that Part D plans must offer. The standard benefit is defined in terms of the benefit structure and not in terms of the drugs that must be covered. In 2010, the standard benefit requires payment of a $310 deductible, then 25% coinsurance drug costs up to an initial coverage limit of $2,830. Once this initial coverage limit is reached, the beneficiary must pay the full cost of his/her prescription drugs up until the total out-of-pocket expensesOut-of-pocket expenses
Out-of-pocket expenses are direct outlays of cash which may or may not be later reimbursed.In operating a vehicle, gasoline, parking fees and tolls are considered out-of-pocket expenses for the trip...
reach $4,550 (excluding premiums). This coverage gap existing between the initial coverage limit and the catastrophic coverage limit is referred to more commonly as the "Donut Hole
Donut Hole (Medicare)
The Medicare Part D coverage gap — informally known as the Medicare donut hole — is the difference of the initial coverage limit and the catastrophic coverage threshold, as described in the Medicare Part D prescription drug program administered by the United States federal government...
". Once the beneficiary reaches catastrophic coverage, he or she pays the greater of 5% coinsurance, or $2.50 for generic drugs and $6.30 for brand-named drugs. The catastrophic coverage amount is calculated on a yearly basis, and a beneficiary who reaches catastrophic coverage by December 31 of one year will start his or her deductible anew on January 1.
The standard benefit is not the most common benefit offered by Part D plans. Only 11 percent of PDPs for 2010 offer the defined standard benefit. Plans vary widely in their formularies and cost-sharing requirements. Most eliminate the deductible and use tiered drug co-payments rather than coinsurance. The only out-of-pocket costs that count toward getting out of the coverage gap and into catastrophic coverage are True Out-Of-Pocket (TrOOP) expenditures. TrOOP expenditures accrue only when drugs on plan's formulary are purchased in accordance with the restrictions on those drugs. Monthly premium payments do not count towards TrOOP.
Among Medicare Part D enrollees in 2007 who were not eligible for low-income subsidies, 26% had spending high enough to reach the coverage gap. Fifteen percent of those reaching the coverage gap (4% overall) had spending high enough to reach the catastrophic coverage level. Enrollees reaching the coverage gap stayed in the gap for just over four months on average. In 2010, 80% of PDPs offered no coverage within the Donut Hole, and almost all the remaining 20% of plans limited gap coverage to generic drugs.
Under the Patient Protection and Affordable Care Act
Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act is a United States federal statute signed into law by President Barack Obama on March 23, 2010. The law is the principal health care reform legislation of the 111th United States Congress...
of 2010, the "Donut Hole" coverage gap will be gradually eliminated through a combination of measures including brand-name prescription drug discounts, generic drug discounts, and a gradual decrease in the "catastrophic coverage" threshold. The "Donut Hole" coverage gap is due to be completely eliminated by 2020.
Most plans use specialty drug tiers, and some have a separate benefit tier for injectable drugs. Beneficiary cost sharing can be higher for drugs in these tiers.
Beneficiary premiums
The average (weighted) monthly premium for PDPs was $35.09 in 2009, which is an increase from $29.89 in 2008. Premiums are projected to increase to $38.94 for 2010 as well. In 2007, eight percent of beneficiaries enrolled in a PDP chose one with some gap coverage. Among beneficiaries in MA-PD plans, enrollment in plans offering gap coverage was 33% (up from 27% in 2006). Premiums are significantly higher for plans with gap coverage. Major Part D plan sponsors are dropping their more expensive options, and developing lower cost ones.Low-income subsidies
One option for those struggling with drug costs is the low-income subsidy. Beneficiaries with income below 150% poverty are eligible for the low-income subsidy, which helps pay for all or part of the monthly premium, annual deductible, and drug co-payments. The Centers for Medicare and Medicaid ServicesCenters for Medicare and Medicaid Services
The Centers for Medicare & Medicaid Services , previously known as the Health Care Financing Administration , is a federal agency within the United States Department of Health and Human Services that administers the Medicare program and works in partnership with state governments to administer...
(CMS) estimated that 12.5 million Part D beneficiaries were eligible for low-income subsidies in 2009.
The subsidy award is given a level with the following effects:
| Level | Deductible | Generic Copay | Brand Copay | Catastrophic Coverage |
|---|---|---|---|---|
| 1 | $0 | $2.50 | $6.30 | $0 copays on all meds |
| 2 | $0 | $1.10 | $3.30 | $0 copays on all meds |
| 3 | $0 | $0 | $0 | $0 copays on all meds |
| 4 | $63 max | 15% | 15% | $2.50 Generic & $6.30 Brand copays |
Note: A common source of confusion; When the award letters were sent out for 2006 and 2007 subsidies the wording referred to a plan’s premium being paid for 100%. In actuality the amount paid is usually matched to the amount charged for the basic plan offered by the carrier. If this is the plan the customer has then, as expected, the premium is paid for. If the member has selected other than the most basic level of coverage then the premium will likely be higher than the amount paid for by the subsidy. This may result in the member being charged a monthly amount while thinking they have no monthly bill.
Excluded drugs
While CMS does not have an established formulary, Part D drug coverage excludes drugs not approved by the Food and Drug AdministrationFood and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
, those prescribed for off-label use, drugs not available by prescription for purchase in the United States, and drugs for which payments would be available under Parts A or B of Medicare.
Part D coverage excludes drugs or classes of drugs which may be excluded from Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
coverage. These may include:
- Drugs used for anorexiaAnorexia (symptom)Anorexia is the decreased sensation of appetite...
, weight lossWeight lossWeight loss, in the context of medicine, health or physical fitness, is a reduction of the total body mass, due to a mean loss of fluid, body fat or adipose tissue and/or lean mass, namely bone mineral deposits, muscle, tendon and other connective tissue...
, or weight gainWeight gainWeight gain is an increase in body weight. This can be either an increase in muscle mass, fat deposits, or excess fluids such as water.-Description:... - Drugs used to promote fertilityFertilityFertility is the natural capability of producing offsprings. As a measure, "fertility rate" is the number of children born per couple, person or population. Fertility differs from fecundity, which is defined as the potential for reproduction...
- Drugs used for erectile dysfunction
- Drugs used for cosmetic purposes (hair growth, etc.)
- Drugs used for the symptomatic relief of cough and colds
- BarbiturateBarbiturateBarbiturates are drugs that act as central nervous system depressants, and can therefore produce a wide spectrum of effects, from mild sedation to total anesthesia. They are also effective as anxiolytics, as hypnotics, and as anticonvulsants...
s - BenzodiazepineBenzodiazepineA benzodiazepine is a psychoactive drug whose core chemical structure is the fusion of a benzene ring and a diazepine ring...
s - Prescription vitamins and mineral products, except prenatal vitaminsPrenatal vitaminsPrenatal vitamins are vitamin supplements intended to be taken before and during pregnancy and during postnatal lactation. Although not intended to replace a healthy diet, prenatal vitamins provide women of child bearing age with nutrients recognized by the various health organizations including...
and fluoride preparations - Drugs where the manufacturer requires as a condition of sale any associated tests or monitoring services to be purchased exclusively from that manufacturer or its designee
While these drugs are excluded from basic Part D coverage, drug plans can include them as a supplemental benefit, provided they otherwise meet the definition of a Part D drug. However plans that cover excluded drugs are not allowed to pass on those costs to Medicare, and plans are required to repay CMS if they are found to have billed Medicare in these cases.
Plan formularies
Part D plans are not required to pay for all covered Part D drugs. They establish their own formularies, or list of covered drugs for which they will make payment, as long as the formulary and benefit structure are not found by CMS to discourage enrollment by certain Medicare beneficiaries. Part D plans that follow the formulary classes and categories established by the United States PharmacopoeiaPharmacopoeia
Pharmacopoeia, pharmacopeia, or pharmacopoea, , in its modern technical sense, is a book containing directions for the identification of samples and the preparation of compound medicines, and published by the authority of a government or a medical or pharmaceutical society.In a broader sense it is...
will pass the first discrimination test. Plans can change the drugs on their formulary during the course of the year with 60 days notice to affected parties.
Typically, each Plan's formulary is organized into tiers, and each tier is associated with a set copay amount. Most formularies have between 3 and 5 tiers. The lower the tier, the lower the copay amount. For example, Tier 1 might include all of the Plan's preferred generic drugs, and each drug within this tier might have a copay of $5–10 per prescription. Tier 2 might include the Plan's preferred brand drugs with a copay of $20–$30, while Tier 3 may be reserved for non-preferred brand drugs which are covered by the plan at a higher copay level - perhaps $40–$100. Tiers 4 and higher typically contain specialty drugs, which have the highest copays because they are generally quite expensive.
The Plan's tiered copay amounts for each drug only apply during the initial period before the coverage gap. Once in the coverage gap, also known as the Donut Hole
Donut Hole (Medicare)
The Medicare Part D coverage gap — informally known as the Medicare donut hole — is the difference of the initial coverage limit and the catastrophic coverage threshold, as described in the Medicare Part D prescription drug program administered by the United States federal government...
, the person must pay for 100% of the prescription costs, based on prices established by the Plan. In 2008, 4% of Medicare beneficiaries spent enough to qualify for catastrophic coverage at which point the beneficiary pays 5% of the total drug cost or a co-payment of $2 for generics/preferred drugs and $5 for brand-name drugs, whichever is greater. In 2009, Plans reach catastrophic coverage when the beneficiary reaches $6,154 in total drug costs.
The primary differences between the formularies of different Part D plans relate to the coverage of brand-name drugs. Nine out of the ten plans with the highest enrollment increased the number of drugs on their formularies in 2007. Plans have generally made fewer changes for 2008. One exception is Silverscript (Caremark Rx
Caremark Rx
Caremark Pharmacy Services is the prescription benefit management subsidiary of CVS Caremark Corporation, headquartered in Woonsocket, Rhode Island and Nashville, Tennessee.-Company history:...
), which significantly increased the number of drugs on its 2008 formulary.
Number of participants
At the start of the program in January 2006, it was expected that eleven million people would be covered by Medicare Part D; of those, six million would be dual eligible. About two million people who were covered by employers would likely lose their employee benefits.As of January 30, 2007, nearly 24 million individuals were receiving prescription drug coverage through Medicare Part D (PDPs and MA-PDs combined), according to CMS. There are other methods of receiving drug coverage when enrolled in Medicare, including the Retiree Drug Subsidy (RDS), Federal retiree programs such as TRICARE
TRICARE
TRICARE, formerly known as the Civilian Health and Medical Program of the Uniformed Services , is a health care program of the United States Department of Defense Military Health System. TRICARE provides civilian health benefits for military personnel, military retirees, and their dependents,...
and Federal Employees Health Benefits Program (FEHBP) or alternative sources, such as the Department of Veterans Affairs
United States Department of Veterans Affairs
The United States Department of Veterans Affairs is a government-run military veteran benefit system with Cabinet-level status. It is the United States government’s second largest department, after the United States Department of Defense...
. Including people in these categories, more than 39 million Americans are covered for prescriptions.
As of April 2006, the primary private insurance plans providing Medicare Part D coverage were UnitedHealth with 3.8 million subscribers, or 27 percent of the total, Humana
Humana
Humana Inc. , founded in 1961 in Louisville, Kentucky, is a Fortune 100 company that markets and administers health insurance. With a customer base of over 11.5 million in the United States, the company is the largest Fortune 100 company headquartered in the Commonwealth of Kentucky, and has a...
with 2.4 million, or 18 percent, and WellPoint
WellPoint
WellPoint, Inc. is the largest health plan company in the Blue Cross and Blue Shield Association. It was formed when WellPoint Health Networks, Inc. merged into Anthem, Inc., with the surviving Anthem adopting the name, WellPoint, Inc...
with 1 million, or 7 percent. Companies with the next largest shares were MemberHealth, with 924,100 subscribers (7 percent); WellCare Health Plans, with 849,700 (6 percent); and Coventry Health Care
Coventry Health Care
Coventry Health Care, Inc. is a diversified national insurer in the United States.Based in Bethesda, Maryland, Coventry operates health plans, insurance companies, network rental and workers’ compensation services companies...
, with 596,100 (4 percent). CMS offers updated enrollment numbers on their website.
Program costs
As of the end of year 2008, the average annual per beneficiary cost spending for Part D, reported by the Department of Health and Human Services, was $1,517, making the total expenditures of the program for 2008 $49.3 (billions). Projected net expenditures from 2009 through 2018 are estimated to be $727.3 billion.Implementation issues
- Plan and Health Care Provider goals are not aligned: PDP's and MA's are rewarded for focusing on low cost drugs to all beneficiaries, while Providers are rewarded for quality of care – sometimes involving expensive technologies.
- Conflicting goals: Plans are required to have a tiered exemptions process for beneficiaries to get a higher-tier drug at a lower cost, but plans must grant exception when medically necessary. However, the rule denies beneficiaries the right to request a tiering exception for certain high-cost drugs.
- Lack of standardization: Drugs appearing on Tier 2 in one plan may be on Tier 3 in another. Tier 2 drugs may have a different co-pay with different plans. There are plans with no deductibles and the coinsurance for the most expensive drugs varies widely. Some plans may insist on step therapy, which means that the patient must use generics first before the company will pay for higher priced drugs. There is an appeal process, but the burden is on the beneficiary, as the insurer will not pay for the desired drug during the appeal process.
- Standards for electronic prescribingElectronic prescribingElectronic prescribing or e-prescribing is the ability to send error-free, accurate, and understandable prescriptions electronically from the healthcare provider to the pharmacy. E-prescribing is meant to reduce the risks associated with traditional prescription script writing. It is also one of...
for Medicare Part D conflict with regulations in many US states.
Impact on beneficiaries
One study published in April 2008 found that the percentage of Medicare beneficiaries who reported forgoing medications due to cost dropped after the implementation of Medicare Part D, from 15.2 percent in 2004 and 14.1 percent in 2005 to 11.5 percent in 2006. The percentage who reported skipping other basic necessities to pay for drugs also dropped, from 10.6 percent in 2004 and 11.1 in 2005 to 7.6 percent in 2006. Among the very sickest beneficiaries there was no reduction in the percentage who reported skipping medications, but fewer reported forgoing other necessities to pay for their medicines. A second study appearing in the same issue of JAMA found that not only did Medicare beneficiaries enrolled in Part D still skip doses or switch to cheaper drugs, many do not understand the program. Another study found that the Medicare Part D prescription benefit resulted in modest increases in average drug utilization and decreases in averageout-of-pocket expenditures among Part D beneficiaries Further studies by the same group of researchers indicate that the net impact of Medicare Part D among beneficiaries is a decrease in the use of generic drugs, which is consistent with economic theory, and shows how assessing Medicare Part D is complex . A further study concludes that although there was a substantial reduction in out-of-pocket costs and a moderate increase in medication utilization among Medicare beneficiaries during the first year after Part D, there was no evidence of improvement in emergency department use, hospitalizations, or preference-based health utility for those eligible for Part D during its first year of implementation. It was also found that there were no significant changes in trends in the dual eligibles' out-of-pocket expenditures, total monthly expenditures, pill-days, or total number of prescriptions due to Part D.
Criticisms
By the design of the program, the federal government is not permitted to negotiate prices of drugs with the drug companies, as federal agencies do in other programs. The Department of Veterans AffairsDepartment of Veterans Affairs
Department of Veterans Affairs may refer to:*Department of Veterans' Affairs, Australia*United States Department of Veterans Affairs*Veterans Affairs Canada*Ministry of Patriots' and Veterans' Affairs...
, which is allowed to negotiate drug prices and establish a formulary, pays 58% less for drugs, on average, than Medicare Part D. For example, Medicare pays $785 for a year's supply of Lipitor (atorvastatin), while the VA pays $520.
Former Congressman Billy Tauzin
Billy Tauzin
Wilbert Joseph Tauzin II , usually known as Billy Tauzin, American lobbyist and politician of Cajun descent, was President and CEO of PhRMA, a pharmaceutical company lobby group...
, R-La., who steered the bill through the House, retired soon after and took a $2 million a year job as president of Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America , founded in 1958, is a trade group representing the pharmaceutical research and biopharmaceutical companies in the United States. PhRMA's stated mission is advocacy for public policies that encourage the discovery of new medicines for patients...
(PhRMA), the main industry lobbying
Lobbying
Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...
group. Medicare boss Thomas Scully, who threatened to fire Medicare Chief Actuary Richard Foster if he reported how much the bill would actually cost, was negotiating for a new job as a pharmaceutical lobbyist as the bill was working through Congress. A total of 14 congressional aides quit their jobs to work for the drug and medical lobbies immediately after the bill's passage.
In response, the Manhattan Institute
Manhattan Institute
The Manhattan Institute for Policy Research is a conservative, market-oriented think tank established in New York City in 1978 by Antony Fisher and William J...
, a free-market think tank
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
, which, according to the Capital Research Center, receives funding from a large number of private interests including pharmaceutical companies, issued a report by Frank Lichtenberg, a business professor at Columbia University, that said the VA National Formulary excludes many new drugs. Only 38% of drugs approved in the 1990s and 19% of the drugs approved since 2000 are on the formulary. He also argues that the life expectancy of veterans "may have declined" as a result.
Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
disagreed, comparing patients in the Medicare Advantage plans, which are administered by private contractors with a subsidy of 11% over traditional Medicare, to the VA system: mortality rates in Medicare Advantage plans are 40% higher than mortality of elderly veterans treated by the V.A., said Krugman, citing the Medicare Payment Advisory Commission.
The plan requires Medicare beneficiaries whose total drug costs reach $2,700 to pay 100% of prescription costs until $4,350 is spent out of pocket. (The actual threshold amounts will change year-to-year and plan-by-plan, and many plans offer limited coverage during this phase.) This coverage gap is known as the "Donut Hole
Donut Hole (Medicare)
The Medicare Part D coverage gap — informally known as the Medicare donut hole — is the difference of the initial coverage limit and the catastrophic coverage threshold, as described in the Medicare Part D prescription drug program administered by the United States federal government...
." While this coverage gap will not affect the majority of program participants, about 25% of beneficiaries enrolled in standard plans find themselves without prescription drug coverage for much of the plan year . However, the Washington Post reports that upwards of 80% of enrollees are satisfied with their coverage, despite the fact that nearly half had chosen plans that do not cover the "donut hole." Medical researchers say that patient satisfaction surveys are a poor way to evaluate medical care. Most respondents aren't sick, so they don't need medical care, so they're usually satisfied. The only respondents who can evaluate care are respondents who are sick, who are usually a minority.
Critics, such as Ron Pollack, executive director of Families USA, said in late 2006 that even the satisfied enrollees wouldn't be so satisfied the next year when the prices go up. However, a survey released by the AARP
AARP
AARP, formerly the American Association of Retired Persons, is the United States-based non-governmental organization and interest group, founded in 1958 by Ethel Percy Andrus, PhD, a retired educator from California, and based in Washington, D.C. According to its mission statement, it is "a...
in November 2007 found that 85% of enrollees reported being satisfied with their drug plan, and 78% said that they had made a good choice in selecting their plan.
According to a January 2006 article by Trudy Lieberman of Consumers Union
Consumers Union
Consumers Union is a non-profit organization best known as the publisher of Consumer Reports, based in the United States. Its mission is to "test products, inform the public, and protect consumers."...
, consumers can have up to 50 choices, in hundreds of combinations of deductible
Deductible
In an insurance policy, the deductible is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses. It is normally quoted as a fixed quantity and is a part of most policies covering losses to the policy holder. The deductible must be paid by the insured,...
s, co-insurance (the percentage consumers pay for each drug); drug utilization techniques (trying cheaper drugs first); and drug tiers, each with their own co-payments (the flat amount consumers pay for each drug). Co-payments differ on whether people buy generic drug
Generic drug
A generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
s, preferred brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
s, non-preferred brands or specialty drugs, and whether they buy from an in-network or out-of-network pharmacy. There is no standard nomenclature, so sellers can call the plan anything they want. They can also cover whatever drugs they want.
As a candidate, Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
proposed "closing the 'doughnut hole'" in his campaign agenda, and subsequently proposed a plan to reduce costs for recipients from 100% to 50% of these expenses. The cost of the plan would be borne by the drug manufacturers for name-brand drugs and by the government for generics.
Some enrollees criticize the Medicare Plan Finder as complex to use, especially for many Medicare beneficiaries who have limited computer skills and Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
access. While the use of this tool is essential for people to make an informed choice based on actual costs for each plan it provides no benefit for those dual eligibles who are assigned to plans randomly. However, dual eligibles have the right to switch plans every month in order to enroll in a plan that better meets their prescriptions needs and for beneficiaries that aren't dual-eligible, most health insurance agents and brokers or social workers can help find the best plan for those individuals. CMS funds a national program of counselors to assist all Medicare beneficiaries, including duals, with their plan choices. The program is called State Health Insurance Assistance Program (SHIP).
See also
- HealthHealthHealth is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...
- Health economicsHealth economicsHealth economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and health care...
- Health insurance in the United StatesHealth insurance in the United StatesThe term health insurance is commonly used in the United States to describe any program that helps pay for medical expenses, whether through privately purchased insurance, social insurance or a non-insurance social welfare program funded by the government...
- Medicare Prescription Drug, Improvement, and Modernization ActMedicare Prescription Drug, Improvement, and Modernization ActThe Medicare Prescription Drug, Improvement, and Modernization Act is a federal law of the United States, enacted in 2003. It produced the largest overhaul of Medicare in the public health program's 38-year history.The MMA was signed by President George W...
- National pharmaceuticals policyNational pharmaceuticals policyA National Pharmaceuticals Policy is one that aims at ensuring that people get good quality drugs at the lowest possible price, and that doctors prescribe the minimum of required drugs in order to treat the patient's illness...
- Pharmaceutical companyPharmaceutical companyThe pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices...
- PharmacologyPharmacologyPharmacology is the branch of medicine and biology concerned with the study of drug action. More specifically, it is the study of the interactions that occur between a living organism and chemicals that affect normal or abnormal biochemical function...
- Prescription drug prices in the United StatesPrescription drug prices in the United StatesPrescription drug prices in the United States are the highest in the world. "The prices Americans pay for prescription drugs, which are far higher than those paid by citizens of any other developed country, help explain why the pharmaceutical industry is — and has been for years — the most...
- Prescription costsPrescription costsPrescription costs are a common health care cost for many people and also the source of considerable economic hardship for some. These costs are sometimes referred to as out-of-pocket prescription costs, since for those with insurance, the total cost of their prescriptions may include expenses...
External links
Government resources- Centers for Medicare & Medicaid Services (CMS).
- Medicare.gov, the official website for people with Medicare.
- Prescription Drug Coverage homepage at Medicare.gov, a central location for Medicare's web-based information about the Part D benefit.
- "Landscape of Plans", at Medicare.gov, state-by-state breakdown of all Part D plans available by area, including stand-alone (drug coverage only) plans and other coverage plans.
- State Pharmaceutical Assistance Programs at Medicare.gov, links to contact information for each state's SPAP program.
- Enroll in a Medicare Prescription Drug Plan at Medicare.gov, the web-based tool for enrolling online in a Part D plan.
- Official Medicare publications at Medicare.gov, includes official publications about the Part D benefit.
- Medicare & You handbook for 2006 at Medicare.gov, includes information about the Part D benefit.
- Information about the 1-800-MEDICARE helpline from Medicare.gov, a 24X7 toll-free number where anyone can call with questions about the Part D benefit.
- Prescription Drug Coverage homepage at Medicare.gov, a central location for Medicare's web-based information about the Part D benefit.
Articles
- "The Big Drug Scam", by Rich Lowry, National Review Online, January 16, 2007.
- "A Recipe for Cynicism", by Jonah Goldberg, National Review Online, November 29, 2006.
- "Success of Drug Plan Challenges Democrats", by Lori Montgomery and Christopher Lee, Washington Post, November 26, 2006.
- "Medicare Part D Gets a Bipartisan F", by Jerry Mazza, Online Journal, February 3, 2006.
- "Part D From Outer Space", by Trudy Lieberman, The NationThe NationThe Nation is the oldest continuously published weekly magazine in the United States. The periodical, devoted to politics and culture, is self-described as "the flagship of the left." Founded on July 6, 1865, It is published by The Nation Company, L.P., at 33 Irving Place, New York City.The Nation...
, January 30, 2006. - "The Great Society Meets the 21st Century", by Michael Johns, Orthopedic Technology Review, January 2004.
- The States Step In As Medicare Falters; Seniors Being Turned Away, Overcharged Under New Prescription Drug Program, by Ceci Connolly, Washington Post, Saturday, January 14, 2006.
- Troubles with Medicare Prescription Drug Program, PBS NewsHour with Jim Lehrer, January 16, 2006.
Other resources
- "Medicare Part D Briefing Room", from the American Society of Consultant PharmacistsAmerican Society of Consultant PharmacistsThe American Society of Consultant Pharmacists is an international professional association that provides education, advocacy, and resources to advance the practice of senior care pharmacy, and that represents the interests of consultant pharmacists who work with elderly patients.The organization...
. - "Medicare Prescription Drug Benefit Weekly Q&A Column", from the Kaiser Family FoundationKaiser Family FoundationThe Henry J. Kaiser Family Foundation , or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. It focuses on the major health care issues facing the nation, as well as the U.S. role in global health policy...
. - "My Medicare Matters", sponsored by the National Council on Aging.
- "Medicare Part D Health Issues", from the National Senior Citizens Law Center.
- "Bob Dole On Medicare" - Enrollment/education campaign by former Senator Bob DoleBob DoleRobert Joseph "Bob" Dole is an American attorney and politician. Dole represented Kansas in the United States Senate from 1969 to 1996, was Gerald Ford's Vice Presidential running mate in the 1976 presidential election, and was Senate Majority Leader from 1985 to 1987 and in 1995 and 1996...
and PfizerPfizerPfizer, Inc. is an American multinational pharmaceutical corporation. The company is based in New York City, New York with its research headquarters in Groton, Connecticut, United States...
. - "Medicare Prescription Drug Plan Guide", from America's Health Insurance Plans.
- "Press Gaggle" with Scott McClellanScott McClellanScott McClellan is a former White House Press Secretary for President George W. Bush, and author of a controversial No. 1 New York Times bestseller about the Bush Administration titled What Happened. He replaced Ari Fleischer as press secretary in July 2003 and served until May 10, 2006...
and Dr. Mark McClellanMark McClellanMark Barr McClellan is currently the Director of the Engelberg Center for Health Care Reform, Senior Fellow in Economic Studies and Leonard D. Schaeffer Director's Chair in Health Policy Studies at the Brookings Institution in Washington, DC. McClellan served as Commissioner of the United States...
that includes discussion on Medicare prescription drug benefit, August 29, 2005. - TheMedicareForum.com - An online community Medicare Forum. For anyone who needs help understanding Medicare or has questions about Medicare.