Prescription Drug Benefit Primer

As of January 1, 2006, all prescription drug coverage for those enrolled in both Medicare and Medicaid (dually eligible individuals) is provided through Medicare Part D. Beneficiaries enrolled in Medicaid who had not selected a prescription drug plan by that date were randomly assigned a Part D plan so that they would not miss coverage. Prescription drug coverage for these beneficiaries has no premiums, no deductibles, and little or no prescription co-pays, depending upon the beneficiary’s income.

Who Stands to Benefit Most from Part D?

Beneficiaries with high prescription drugs costs will receive the greatest benefit from Medicare Part D; after enrollees have paid $3,600 out-of-pocket, prescription drug plans will cover 95% of any additional costs during the year, providing significant financial relief to beneficiaries with high drug bills.

Of course, beneficiaries who have current drug coverage through Medigap plans that supplement Medicare coverage will also benefit by joining a Part D plan since most Medigap coverage is not as good as that of Medicare Part D. Patients may keep the Medigap policies that they have now, including the prescription drug coverage, or they may keep the current Medigap policies but replace the current prescription drug coverage with the Medicare prescription drug plan. They may also enroll in a Medicare Advantage Plan that includes prescription drug coverage.

Beneficiaries who are able to find a prescription drug plan that covers all or most of their prescription drugs will benefit more than those who are unable to do so. Patients whose prescription drugs are not covered by their plan may change to a different drug, pay for it out of pocket, or stop taking the drug, which may adversely affect their health. The Medicare Rx Drug Plan Finder at www.medicare.gov is a tool to help patients select a plan based on cost, convenience, and the medicines they take. CMS has also created a Web-based formulary finder: http://formularyfinder.medicare.gov/formularyfinder/selectstate.asp which provides a list of all Part D plans in a given state and links directly to a plan’s home page for a complete formulary.

Finally, beneficiaries with employer-sponsored retiree health benefits should not switch to a Medicare plan unless they are told by the employer that their current coverage is not as good as the Medicare drug coverage. In fact, several companies whose prescription drug coverage is more generous than standard Medicare prescription drug coverage are telling retirees that if they cancel their prescription drug coverage to enroll in the new Medicare drug benefit, they will lose all employer-sponsored health benefits.

Glitches in Launching the Medicare Drug Plan

Some beneficiaries who enrolled in a Part D plan by December 31, 2005, had not received their Medicare drug-plan cards before their next trip to the pharmacy, and the national computerized system for verifying benefits had some difficulty in processing requests for many seniors who believed that they should be covered. In some cases, pharmacies issued free two- and three-day supplies of medications to carry over customers who didn’t have proof that they were covered. However, some beneficiaries have had to pay out-of-pocket due to problems with their cards and others have had to go back to their doctors to get some free samples to carry them over until their cards are processed.