PRESCRIPTION DRUG COVERAGE
Seniors today are living longer and better lives than ever before. And it is high time Medicare caught up with them. The package approved by the House will bring Medicare into the 21st century with a prescription drug benefit. Prescription drugs have made tremendous advances since Medicare was created almost forty years ago. Seniors need and deserve access to the drugs that can help them manage their health and even cure diseases.
The legislation approved by the House creates a voluntary prescription drug benefit for all Medicare beneficiaries. Specifically, the plan will cover 80 percent of a senior's drug costs up to $2000 with a $250 deductible. After a senior has $3500 in out-of-pocket costs, the 100 percent catastrophic coverage kicks in. A key element of the plan, however, is choice. If a senior already has prescription drug coverage and it fits their needs, they will not be required to change plans. The bill also addresses the fact that Medicare, much like Social Security, is facing a massive wave of retirees when the baby boomers reach retirement age. It creates a competitive bidding system that will bring down costs and help sustain Medicare well into the future.
A recent report released by the Department of Health and Human Services estimated that the House bill would provide seniors currently paying full price for their prescription drugs up to 25 percent in savings. It also said that seniors with incomes below 135 percent of the poverty level would pay no monthly premiums and only minimal cost sharing ($2-$5 copay), while those with incomes between 135 percent and 150 percent would pay reduced premiums.
DETAILS ON Rx DRUG BENEFIT
Voluntary Rx Drug Benefit Available to ALL Medicare Beneficiaries
- Entitlement under Medicare
- CBO and CMS Actuary predict universal participation
- Those who want to stay with their current coverage, may do so, and employers encouraged to continue retiree coverage by receiving some assistance
Prescription Drug Benefit
- $250 deductible
- $251- $2,000: 80% coverage, 20% cost-sharing
- Catastrophic protection after $3,500 out-of-pocket (100% of costs covered)
- Affordable premium around $35 per month or about $1 a day
- Good front end benefit aids most seniors (median spending is $1,285)
Targets Resources to Those Who Need It Most
- Fully subsidized premium and cost-sharing up to 135% of poverty, phasing out at 150% of poverty
- Medicare is primary payor and state governments receive assistance by phasing out their Medicaid prescription drug obligations over a number of years
- Low-income beneficiaries pay up to $2 per generic and $5 per brand name drug, per prescription
- High-income beneficiaries (individuals with incomes of $60,000 or couple with incomes of $120,000) have a higher catastrophic benefit
Beneficiaries Choose Plan that is Best for Them
- Choice of at least 2 plans guaranteed
- Competition holds down costs
- Choice of any pharmacy
DETAILS on MEDICARE MODERNIZATIONS
Quality Improvements to Enhance Seniors' Health
- Protections against adverse drug interactions
- Electronic prescribing to minimize medical errors
- Pharmacy therapy and chronic care management for beneficiaries with chronic conditions
Long Overdue Modernizations
- Covers an initial physical, cholesterol screening, and offers disease management
- Rural relief package for underpaid rural hospitals, physicians, and home health
- Revitalizes private plans in Medicare, followed by competitive bidding in which seniors can reduce their premiums
- Adds the President's regional private Enhanced Fee-for-Service and PPO plans
- Enrolls 48 percent of beneficiaries in competitive private plans, according to CMS Actuary
- Initiates FEHBP-style reform in 2010
- Bipartisan regulatory relief and contractor reform
- Competitive bidding for durable medical equipment
- Reforms pricing for drugs administered by physicians, and adequately reimburses oncologists
