# Medicare & Prescription Drugs - New Plan



## M&M (Jan 20, 2002)

This was posted to the Co-Cure List:FYI*************************************************{This may be of interest given that many of US patients haveMedicare coverage as a result of having SSDI benefits. Note,however, that it's quite possible that not all items coveredin this notice will extend to those receiving Medicare benefitsas a result of SSDI.]Date: January 21, 2005For Release: ImmediatelyContact: CMS Media Affairs(202) 690-6145Headline: HHS TAKES MAJOR STEP TO PRESCRIPTION DRUG BENEFITFinal Rules Provide New Help with Drug CostsImprove Medicare Health Plans and Establish Options for RetireesHHS Secretary Tommy G. Thompson today announced the final regulationsestablishing the new Medicare prescription drug benefit and improved accessto health care services through Medicare."For too long, America's seniors have struggled to pay for their medicines.Today sets in motion historic developments for the elderly and disabled. Inless than a year, for the first time, Medicare will offer a prescriptiondrug benefit to help them pay for the prescription drugs their doctors tellthem that they need," Secretary Thompson said.The prescription drug benefit, and the other provisions included in theregulations issued today are key elements of the Medicare Modernization Actpassed by Congress and signed into law by President Bush on Dec. 8, 2003.Enrollment for the new prescription drug plans will begin this November.The regulations issued today:ï¿½ Create the first prescription drug benefit for beneficiaries infee-for-service Medicare. Medicare Advantage plans will continue to offerprescription drug coverage to enrollees and enhance their existing coverage.ï¿½ Help ensure that retirees who currently receive health and drugcoverage from their former employers or unions will continue to be able todo so.ï¿½ Improve the Medicare Advantage program and for the first time offera regional preferred provider organization (PPO) contracting option.ï¿½ Offer two new less costly options for Medigap coverage.The final regulations, developed after an extensive public comment processthat began when proposed rules were published in August, will be on displayat the Federal Register today. Fact sheets accompanying this press releaseprovide more extensive summaries and describe the key changes between theproposed and final rules."All people with Medicare are now one huge step closer to having a new drugbenefit and new health plan options, regardless of their income or how theyreceive their medical coverage," said Centers for Medicare & MedicaidServices Administrator, Mark B. McClellan, M.D., Ph.D. "In less than ayear, seniors will get critical new help with access to 21st century,prevention-oriented medical care."While the Medicare-approved drug discount card remains active throughout2005, the regulations issued today begin the shift from providing discountsand temporary assistance alone to providing broad-based drug coverage in2006.The Medicare Prescription Drug BenefitThe new regulations will provide a prescription drug benefit available toeveryone who is in Medicare, regardless of their income, how they get theirhealth care now (whether through traditional fee-for-service Medicare or aMedicare Advantage plan) or how they currently get their drug coverage.The new rules ensure the drug benefit will:ï¿½ Offer comprehensive help for those with limited means - including nopremiums or deductibles for more than nine million beneficiariesï¿½ Give beneficiaries a choice of at least two drug plans that willcover a comprehensive set of both brand name and generic drugsï¿½ Give beneficiaries convenient access to pharmacies, generally withinjust a few miles or less of their home.ï¿½ Guarantee that Medicare beneficiaries living in nursing facilitieswill be able to enroll in a drug plan and take advantage of the new benefit.All prescription drug plans will contract with long-term care pharmacies.ï¿½ Ensure that dual eligible beneficiaries who have both full Medicaidand Medicare benefits are automatically enrolled in a drug plan if they failto sign up by the middle of December, so that they have no gap in coveragewith the transition to the Medicare benefit.Coverage for RetireesThe new rules give employers and unions a menu of flexible options enablingthem to continue providing high-quality drug coverage for their retirees ata lower cost. An employer whose coverage is at least as good as or betterthan the Medicare benefit and whose contribution to coverage is as good asor better than the Medicare subsidy can receive a tax-free subsidy forcontinuing that coverage. The rules also help employers supplement or "wraparound" the Medicare drug benefit, so comprehensive coverage can be providedat a lower cost, just as many employers currently supplement Part A and Bbenefits. Employers can also use their own customized prescription drug planor Medicare Advantage plan to provide comprehensive coverage. Finally, forthe many retirees in plans with little or no employer contribution,enrolling in the Medicare Part D benefit allows them to lower their drugcosts because of the 75 percent subsidy it provides -- and employers canprovide financial assistance in this case as well, for example by paying thePart B premium or supporting an account based arrangement to providetax-free payments for health care costs.More Help for Beneficiaries Receiving State BenefitsStates will be able to enhance coverage they offer because the new drugbenefit will save states about $8 billion over the next five years. Stateswill only have to pay a portion of the drug costs for "dual eligible"Medicare beneficiaries with Medicaid drug coverage, based on their own priorMedicaid drug cost experience. States with State Pharmacy AssistancePrograms (SPAPs) will be able to provide the same or better coverage fortheir beneficiaries at a lower cost per beneficiary for the states, andstates with Pharmacy Plus programs can also wrap around the Medicare benefitto help lower their costs. States will also be able to receive newassistance with the costs of drug coverage for their retirees, just likeother employers offering qualified retiree drug coverage.More Opportunities in Medicare Advantage ProgramsMedicare Advantage will be strengthened to provide lower-cost coverage andadditional benefits to even more beneficiaries. Those who choose a MedicareAdvantage plan can get drug benefits as part of their overall health plan,allowing the plans to better coordinate beneficiaries' medical care and drugcoverage.The rules create a new regional Medicare Advantage Preferred ProviderOrganizations (PPOs) contracting option as an additional choice for Medicarebeneficiaries beginning on Jan. 1, 2006. A new competitive bidding systemfor paying Medicare Advantage plans is also established. These changesprovide important new options for Medicare beneficiaries who lackcomprehensive and inexpensive supplemental coverage (for example, fromMedicaid or an employer) that provides extra benefits and lowerout-of-pocket costs compared to the traditional fee-for-service Medicareplan. Recent studies indicate that beneficiaries in a Medicare Advantageplan pay about $700 less a year in out-of-pocket medical costs, and sickerbeneficiaries may save as much as $1,900.Unlike the current Medicare Advantage program, which features local plansthat serve individual counties and groups of counties, the new regional PPOswill serve 26 regions across the U.S., which include all rural areas. Theregional maps were released on Dec. 6, 2004, and can be found at http://www.cms.hhs.gov/medicarereform/mmaregions. All regional PPO plans are required to offer the same benefits astraditional fee-for-service Medicare with simplified cost-sharing and newprotections against catastrophic costs. They are also expected to offeradditional benefits not available in fee-for-service Medicare.Medicare is also implementing full risk adjustment of its payments to allMedicare Advantage plans, moving from 50 percent risk adjustment in 2005 to75 percent in 2006 and 100 percent in 2007. Consequently, the funding forcoordinated-care plans in Medicare will be increasingly concentrated onbeneficiaries who have predictably high health needs. The new rule alsoprovides even more assistance for beneficiaries with special needs bysupporting the creation of plans to offer health care services to suchbeneficiaries, including those who are dually eligible for Medicaid, thosewith severe or disabling chronic conditions, and those who live in nursinghomes and other long term care institutions.###


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