More Details on the
Operation of the New Medicare Drug Benefit
This page provides information on the following:
The Medicare Modernization Act, which includes Medicare's drug benefit, was signed into law in December 2003. Click here for a link to the legislation. (Note: This pdf is 415 pages long.)
The Final Regulations
In January 2005, the final regulations governing the operations of the drug benefit were published. Click here to see the regulations. (Note: This pdf is 415 pages long.) Families USA also prepared an analysis of the regulations, which focused on those sections that have the greatest impact on individuals with Medicaid. Click here to see Families USA's analysis.
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Guidances and Comments
The final regulations left many areas of program operation to be resolved through future guidance. Below are links to some of the guidances that have been issued, other items related to the operation of the drug benefit, and Families USA's comments.
Formularies and P&T Committees
Medicare drug plans don't have to cover all of the drugs that Medicare will pay for—plans can develop limited lists of the drugs they will cover. These formularies must be developed by Pharmacy & Therapeutics Committees (P&T). Click here to see CMS's formulary guidances for plans.
- Families USA, as part of The Medicare Working Group, submitted comments on CMS's proposed guidance for reviewing the benefit structures and formularies of Part D plans. The comments were submitted on December 30, 2004 and here signed by 39 organizations. Click here to see the comments.
Transitional Assistance and Long-Term Care
- Drug plans must have a process for helping individuals who are currently taking specific drugs to "transition" to the formulary of the Medicare plan they select. Click here to see CMS's guidance to plans for developing a transition process.
- On April 1, 2006, Medicare beneficiaries lose the protection of extended transition benefits. April Fools for Medicare Part D Beneficiaries? Transitional Benefits End April 1 explains what this means for beneficiaries and what they can do about it. (March 29, 2006)
- Plans also have to provide access for residents of long-term care facilities. Click here for CMS's long-term care guidance (see Clarification - Emergency Fill for LTC Residents [PDF, 12KB]).
- Families USA submitted a single comment letter on both draft guidances in 2005—click here to see the comments. Families USA submitted separate comment letters on 2006 revisions to the formulary guidance (click here) and the transition guidance (click here).
Social Security Process for Screening for Low-Income Subsidy Eligibility
The Social Security Administration has issued regulations on its process for screening individuals for eligibility for Medicare's low-income benefit.
- Click here to see the regulations.
- Click here for Families USA's comments on the initial draft regulations.
Marketing Guidance for Drug Plans
CMS has issued guidance that governs how drug plans can market themselves. Families USA has commented on the guidance in both 2005 and 2006. Click here to read the 2005 comments. Click here to read the 2006 comments. Click here to read the guidance.
PDP Enrollment and Disenrollment Guidance
In June 2006, CMS released proposed changes for the PDP Enrollment and Disenrollment Guidance. Click here to see the proposed changes. Click here to see Families USA's comments on the proposed changes. (June 2006)
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Families USA has conducted a series of conference calls for advocates to provide an overview of specific issues related to the implementation of Medicare Part D. Go to our conference calls page to listen to the series and find out about upcoming calls.
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Other Reports and Resources
Picking a Part D Plan: Déjà Vu All Over Again? discusses why beneficiaries, advocates, and health care providers should be aware of changes in Part D plans that will affect coverage in 2007. It also urges all beneficiaries to examine premiums, drug costs, formularies, and drug restrictions to find the best Medicare drug plan. (November 2006)
Coverage through the "Doughnut Hole" Grows Scarcer in 2007 examines what will happen next year to stand-alone drug plans that provide meaningful doughnut hole coverage—plans that provide doughnut hole coverage of both the generic and non-generic drugs that most seniors need. (November 2006)
Medicare Privatization: Windfall for the Special Interests examines how several decisions by Congress to promote privatized Medicare are costing taxpayers billions of dollars and bringing windfall profits to the insurance and drug industries. The report focuses on 1) overpayments to Medicare Advantage plans, 2) special funding for Medicare regional PPOs, and 3) prices obtained by Part D drug plans. (October 2006)
Testimony of Ron Pollack, Executive Director, Families USA, before the U.S. House Committee on Ways and Means regarding the implementation of the Medicare Part D drug program. (June 14, 2006)
Big Dollars, Little Sense: Rising Medicare Prescription Drug Prices asks two key questions: 1) What has happened to Part D prices for the most frequently prescribed drugs from November 2005 to April 2006?; and 2) How do Part D drug prices now compare to the prices secured by the VA? The answers are both clear and disappointing: 1) Virtually all of the Part D plans raised their prices for the majority of the top 20 drugs in this study. 2) For all of the top 20 drugs prescribed to seniors, VA prices in April were lower than the lowest prices charged by Part D plans. 25 pp. $15.00 (June 2006)
Medicare Drug Program Fails to Reach Low-Income Seniors documents the slow pace of enrollment in Medicare Part D and, particularly, the program's failure to reach those most in need—the low-income seniors and people with disabilities who are entitled to special subsidies. (May 2006)
Expectations Shrinking for Medicare Part D Enrollment assesses the first two months of enrollment in the new drug benefit. The report shows that: 1) enrollment so far is lagging well behind last year's projections; 2) most of those counted as covered already had drug coverage; and 3) low-income beneficiaries are being left behind. | Press Release (February 2006)
Falling Short: Medicare Prescription Drug Plans Offer Meager Savings evaluates how well Medicare prescription drug plans (PDPs) did in giving seniors low drug prices. This report compares the base drug prices reported by Medicare drug plans with the prices negotiated through the Department of Veterans Affairs (VA). (December 2005)
"Medicare and You" handbook: The 2006 edition of "Medicare & You" is available in English and Spanish by clicking here. In 2005, Families USA submitted comments suggesting changes to the handbook. The comments are available by clicking here.
Your Budget and the New Medicare Drug Benefit shows that, because of annual increases in beneficiary costs under Medicare's basic benefit, beneficiaries will need added help to afford the drugs they need.
Prescription Drug Cost-Sharing and Low-Income People: Five Good Reasons to Keep It Minimal makes the point that prescription drugs aren't the only health expenses Medicare beneficiaries must pay for out of pocket. It also outlines the impact that Medicare's cost-sharing could have on those with limited incomes—many of whom won't qualify for added help through Medicare.
Another Hole in the Medicare Drug Benefit argues for allowing Medicare to negotiate with drug manufacturers for lower drug prices.
See also In the States
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Several bills have been introduced in the House and Senate aimed at changing the new Medicare law. Families USA has prepared a series of documents to help you keep track of all this legislation. Click here for a list of Senate and House bills. Click here for a chart showing House bills and their sponsors; click here for a chart showing Senate bills and their sponsors.
Information from Other Sources
From the Kaiser Family Foundation:
Medicare Drug Plans: Experiences of Dual Enrollees and Other Low-Income Beneficiaries is a forum in which experts discussed how well Part D has done in providing low-income subsidies to seniors and beneficiaries with disabilities, as well as dual eligibles. The following materials were released in conjunction with the forum (May 18, 2006):
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