Sign Up for Email Alerts Visit us on Twitter Visit us on Facebook Visit us on YouTube Subscribe to RSS Feeds


Home > Covering Health Issues 2006 - 2007 - Table of Contents > Chapter 5 - Medicare prescription drugs
 

Chapter 5 - Medicare prescription drugs

Change Text Size:   Smaller Text Size   Larger Text Size   Default Text Size    

NOTE: Charts and graphs for this chapter are listed in the right column of the page.
CHAPTER 5 - MEDICARE PRESCRIPTION DRUGS

Content Last Updated: 1/9/2007 2:21:44 PM
Graphics Last Updated: 12/11/2006 8:42:08 PM
Note: Terms in green will show glossary definitions when clicked.

Key Facts

  • As of June 2006, 22.5 million beneficiaries were enrolled in stand-alone Part D plans or Medicare Advantage drug plans.a  Another 15.8 million retained current coverage as good as Part D through former or current employers or the VA.b
  • In 2006, beneficiaries had more than 1,400 stand-alone drug plan options offered by about 65 different organizations.c  Most plans offered benefits with either no deductible or a reduced deductible, but only 15 percent of plans provided any benefits in the coverage gap.d
  • On what drugs to cover, organizations offering plans on a national or near-national basis usually covered the top ten generic drugs on their formularies, but only about half covered all 10 of the most prescribed brand-name drugs.e
  • About 6.6 million beneficiaries with both Medicaid and Medicare coverage were shifted from Medicaid coverage and were auto-enrolled into Medicare plans.f
  • Most employers took the available federal subsidy to retain their retiree coverage, allowing retirees to avoid the disruption of shifting to a Part D plan.  But only about half of these employers indicated they are likely to do so in 2010.g

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“Medicare Modernization Act” or MMA) became law in December 2003. Among other provisions, the MMA created the Part D drug benefit, which became available to Medicare beneficiaries on January 1, 2006.

Before the MMA, Medicare covered no outpatient drugs, an omission that created an increasingly large hole in the program’s benefits.1  Prior to passage of the MMA, Medicare did cover certain physician-administered drugs under Part B.2  

Passage of the MMA came after extended debate in which policymakers were sharply divided over the design of the drug benefit, its structure and its cost – particularly whether it could be restricted to the $400 billion, 10-year budget established by the Bush Administration.3

On May 15, 2006, the initial enrollment period ended.4 Some 22.5 million beneficiaries (out of 43 million overall)5 enrolled in either stand-alone Part D plans or in drug plans affiliated with Medicare Advantage plans.  Most of these beneficiaries were automatically enrolled, either because of their status as dual eligibles (participants in both Medicare and Medicaid) or as current enrollees in Medicare Advantage plans.6  By the Administration’s numbers, an additional 15.8 million beneficiaries have coverage as good as Part D.7 

Instead of offering the benefit itself, Medicare relies on private drug plans that compete among themselves. The benefit is available either from stand-alone private prescription drug plans (PDPs) or drug plans sponsored by Medicare Advantage organizations for those who get their overall benefits from these private health plans.8

These affiliated drug plans are known as “MA-PDs.” (For more on Medicare Advantage plans, See Chapter 4, “Medicare”). These organizations are at risk for the cost of the benefit although the government shares some of the risk.9 

The general outlines of the standard benefit are established by law, though plans have the option of modifying the benefit design. Most plans are using cost management tools (e.g., formularies and prior authorization) to leverage their buying power to negotiate price discounts and thus manage drug costs and to encourage appropriate utilization.10
     
The success of the Medicare drug benefit may be judged by a number of factors, only a few of which will be known in the short term. Furthermore, this program is may undergo administrative and potentially legislative changes in its early years, making it a moving target. This chapter assesses the Part D benefit at this early stage, including a look ahead at the prospects for 2007.

The Shape of Medicare Part D
Medicare Part D relies on private drug plans competing in 39 regions to make the benefit available to beneficiaries covered under traditional Medicare. MA organizations are required to offer at least one plan with a qualified drug benefit to enrollees in each area they serve.  MA enrollees, if they want a drug benefit, must get it from their MA plan. 11

The benefit has a complex design shaped by a combination of political and budget factors.  Under the standard benefit,* beneficiaries are subject to an initial deductible ($250 in 2006) and then must pay 25 percent of drug costs up to an initial coverage limit ($2,250 in 2006). Above the initial coverage limit, beneficiaries are responsible for paying the entire cost of their drugs until they reach $3,600 in out-of-pocket costs, equivalent in 2006 to $5,100 in total drug costs under the standard benefit. This coverage gap is often referred to as the “doughnut hole.” After reaching the threshold for out-of-pocket spending, catastrophic coverage kicks in with only modest cost-sharing, generally 5 percent of the cost of the drug.12 (See table, “Shape of the Standard Benefit in 2006.”)

Plans may substitute their own benefit design for this standard benefit but it must  be actuarially equivalent (i.e., covers the same amount of drug costs on average). Substitute coverage may, for example, replace percentage coinsurance with flat copayments or eliminate the deductible. Plans also may enhance their coverage by adopting a more generous benefit structure. For example, a plan can choose to pay some of a beneficiary's drug costs in the coverage gap.13 Beneficiary premiums and not federal dollars must cover the cost of the value of enhanced coverage.14 Beneficiaries pay a premium to the drug plan they select. In 2006 the average premium, excluding retiree coverage, is less than $24.15

The drug benefit - unlike other parts of the Medicare program - varies according to income. Beneficiaries with incomes below 135 percent of the federal poverty level ($13,230 for a single person and $17,820 for a couple in 2006) are eligible for a subsidy if they also have assets below a specified level ($6,000 for an individual and $9,000 for a couple in 2006). Once enrolled, they typically face no premiums and only minimal out-of-pocket costs. Those with Medicaid coverage do not have to meet the federal asset test, although some states apply their own asset test. Beneficiaries with incomes between 135 and 150 percent of the federal poverty level and with somewhat higher assets may receive partial subsidies.16
     
In exchange for taking over from the states coverage of drugs for Medicaid beneficiaries, the federal government recoups a share of the cost from the states.17 States will now be required to send monthly payments to the federal government based on estimates of how much the state would have had to pay through its Medicaid program if it were not for the Medicare prescription drug benefit.18 Known as the "clawback", these payments have been challenged (unsuccessfully, as of September 2006) by states in court for a variety of technical and policy reasons.19  Many states maintain that “clawback” costs will exceed their previous Medicaid costs, since many had taken effective steps to manage their costs.20

Plans in the Part D Market
Approximately 65 different organizations offered PDPs in 2006. Ten organizations offered plans in all 39 regions covering the states.21 Four other organizations offered plans in most regions, while others (especially locally based insurers) participated in a smaller set of regions. Most organizations, mainly large insurance companies and pharmacy benefit management chose to offer three plan options in each region, thus guaranteeing that beneficiaries across the country have a large array of options.22 Nationally, more than 1,400 plan options were available through Part D in 2006. In most regions, beneficiaries faced between 40 and 45 plan options.23
     
In the first year, two organizations dominated the market nationally, controlling nearly half the stand-alone PDP market and about one-third of the MA-PD market, according to partial data released by CMS.24  United HealthCare (including its merger partner, PacifiCare) has the largest share, due in part to its affiliation with AARP, while Humana obtained the second largest share, probably as a result of its aggressive strategy of offering low-premium plans.  No other organization topped 10 percent of national enrollment in the PDP market. United/PacifiCare, Humana, and Kaiser Permanente have the strongest enrollment numbers in the MA market.25
     
Monthly premiums across all stand-alone prescription drug plans range from $1.87 to $104.89 (See chart, “Range of Premiums for All Stand-Alone Prescription Drug Plans.”)26 Some plans are available at no premium charge to enrollees who are eligible for the low-income subsidy.27,28 In order for the subsidy to be applicable, plans must be priced below a regional benchmark that is defined as the average of plan premiums, including MA premiums but excluding the value of enhanced benefits.28 Benchmarks in 2006 ranged from $23.25 a month in California to $36.39 in Mississippi. On average, subsidy-eligible beneficiaries have between five and 14 options.29

Drug plans have taken full advantage of the flexibility allowed by law to vary their benefit designs and formularies. A majority of plans chose to lower or eliminate the standard deductible, substitute flat copayments  for coinsurance (e.g., $25 for a one-month supply instead of 25 percent of the cost), and adopt tiered cost-sharing where the beneficiary pays different amounts for different types of drugs (See chart, “Cost-Sharing Designs for Stand-Alone Prescription Drug Plans”).

The most common approach was to use three tiers with different copayment amounts for generic drugs, preferred brand-name drugs and non-preferred brand-name drugs. Sometimes there is a separate tier for specialty drugs (e.g., biotechnology products or injectable drugs).  Relatively few plans chose to fill in the doughnut hole at all, and most that did cover only generic drugs in this gap.30

Median copayment levels for 2006 are about $5 for generic drugs, $25 for preferred brand-name drugs, and $53 for non-preferred drugs.31  But there is substantial variation among plans. Several have no copayments for generic drugs, while others charge as much as $15. Copayments typically range from about $15 to $40 for preferred brand drugs and from about $40 to $72.50 for non-preferred drugs.32

The MMA limits plan flexibility around formularies and other cost management approaches by requiring that plan bids be rejected if the proposed design and benefits are “likely to substantially discourage enrollment by certain part D eligible individuals.”33  . This aims to protect beneficiaries by ensuring that formularies are not overly restrictive and that commonly needed drugs are available.34 A plan must cover at least two drugs in each therapeutic class and most or all drugs in certain designated classes (e.g., drugs used to treat mental health conditions and HIV/AIDS).35 Beneficiaries may request exceptions and appeal most situations where coverage of a drug is denied.36
     
The competing drug plans made significantly different decisions about their formularies. The national and near-national plans covered between 64 percent and 97 percent of a sample of 152 drugs.  While nearly all these plans covered the ten most commonly prescribed generic drugs, only about half the plans covered the top ten brand-name drugs (See table, “Number and Percentage of Plans Covering Top 10 Brand-Name and Generic Drugs”). Plans sometimes omitted drugs with therapeutically similar competitors, for example, covering Lipitor but not Zocor as a treatment for high cholesterol.37  When a drug is not listed on the formulary, beneficiaries must pay for the drug out of pocket, switch to an alternative or request an exception.38

Placement on different tiers can also mean substantially different costs for the beneficiary.  An enrollee could pay from $15 to $62 for Norvasc (a common drug for high blood pressure), $15 to $100 for Namenda (for Alzheimer’s disease) or even $20 to $1,276 for Enbrel (for rheumatoid arthritis), depending on the plan selected.39

Relationship of Part D to Existing Coverage
The role of Medicare Part D differs substantially depending on a beneficiary’s situation. Some people have chosen to stay with their previous source of drug coverage. For others, Medicare Part D provides coverage not previously available or replaces their current source of coverage.

Most beneficiaries with coverage through former employers were able to retain it in 2006 and avoid the disruption of moving into Part D.40  As an incentive for employers to continue offering retiree drug coverage at least equivalent to Part D (referred to as “creditable coverage”), Medicare pays a tax-free subsidy equal to 28 percent of allowable drug costs between $250 and $5,000.  Although four of every five large employers reported that they would accept the subsidy and continue to provide benefits in 2006, only about half indicated they are likely to do so in 2010.41
     
About 6.6 million dually eligible beneficiaries—who had been receiving drug coverage from Medicaid—were required to switch to Part D plans.42 Dually eligible beneficiaries were automatically enrolled for the low-income subsidy and were randomly auto-enrolled in a Part D plan with an option of switching to a different plan.43

Medicaid beneficiaries, if enrolled in eligible Medicare drug plans, do not pay premiums or deductibles, and do not face a coverage gap. Although some beneficiaries had no copayments under Medicaid, they generally now face copayments of between $1 and $5 (depending on their income level and whether a drug is generic or brand). 44  Some may also find that drugs they take are not on their Part D plan’s formulary. CMS required Part D plans to establish transition plans to accommodate, at least temporarily, beneficiaries in this situation.45
     
Most beneficiaries who were enrolled in MA plans in 2005 took the option of receiving Part D coverage from their plan. Nearly 40 percent of MA plans offered drug coverage in 2006 without an added premium and about two-thirds provided enhanced drug coverage.46 In recent years many MA plans had reduced the scope of their drug coverage so most beneficiaries enrolled in MA plans should have seen improvements to their previous drug coverage.47
     
Most beneficiaries with privately purchased supplemental insurance, called Medigap, were expected to switch into Part D plans. No new Medigap policies with drug coverage can be sold, although those with such coverage have the option of retaining it. Medigap policies have high premiums for relatively thin benefits and do not qualify as creditable coverage. As a result, policyholders should have better coverage at a lower price by switching to Part D plans.48
     
In some states, beneficiaries have had coverage available through state pharmacy assistance programs. Typically, these state-funded programs provided coverage to beneficiaries with incomes below a certain threshold but not low enough to make them eligible for Medicaid. Most larger state programs continue to be available, though modified to wrap around Part D. Beneficiaries eligible for these state pharmacy assistance programs typically have maintained coverage at least as generous as they had previously, while the states save money because Medicare now pays a portion of the drug costs.49,50

Education, Marketing, and Enrollment
Medicare faced a great challenge in educating beneficiaries about the new benefit. One incentive to enroll is the penalty for late enrollment, which discourages people from deferring enrollment until they have substantial drug costs. Beneficiaries who sign up after the end of the initial open enrollment season without creditable coverage from another source will pay a larger premium (increased by 1 percent of the national average premium for each month not enrolled) for the duration of their participation in the program.51 Such a beneficiary deciding in July 2006 to enroll must wait for the November open season to choose a plan effective in January 2007; in addition, this beneficiary will pay a 7 percent premium surcharge (probably about $2 per month in 2007).52
     
Confusion about the drug benefit has been a major implementation concern. About 40 percent of beneficiaries reportedly found the process of researching a plan selection to be difficult.   CMS ran an extensive information campaign that included mailings, flyers, advertising, a toll-free telephone line (1-800-Medicare), and website (www.medicare.gov). Yet only one-fifth of surveyed beneficiaries reported that either they or someone helping them used the toll-free line, and only 11 percent used the website.  Only 6 percent of surveyed respondents reported using a counselor.53 
     
Despite considerable confusion along the way, CMS reported enrollment of 22.5 million beneficiaries in the prescription drug plan as of June 11, 2006. Over half of these were dually eligible beneficiaries assigned to plans or beneficiaries adding Part D coverage to existing Medicare Advantage coverage (See table, “Enrollment in Part D and Other Sources of Drug Coverage, June 2006.”)54  

As of June 2006, 1.8 million beneficiaries had applied and qualified for the low-income subsidy (in addition to dual eligibles and others who were automatically deemed eligible).  According to CMS estimates, another 3.3 million have not applied despite being eligible.  CMS has committed to ongoing outreach to these individuals.55  Some 2.3 million applicants were rejected as a result of excess income, assets, or both.56

Monitoring Implementation
It is too early to evaluate the overall success of Medicare Part D, which will be measured in the court of public opinion by enrollment numbers and the general satisfaction of beneficiaries. In the meantime, Congress may decide to make mid-course corrections or more fundamental changes to the program’s design.  Beneficiaries, although sometimes frustrated by the enrollment process and the early transition, generally have been satisfied with the benefit itself.57  Whether they will remain so as they hit the coverage gap or face decisions about whether to switch plans in future open enrollment periods is unknown.

Several measures beyond enrollment should be examined as indicators of success. One is the overall cost of the program – a matter of debate prior to its inception. In 2003, CBO estimated its cost at $394 billion over 10 years while in 2004 the Health and Human Services Office of the Actuary priced the program at $534 billion.58 In 2005, the Administration released an estimate pricing the program at $720 billion between 2006 and 2015. 
     
Part of the reason for the discrepancy between the earlier and later figures is that the earlier numbers included in their 10-year estimates initial start up years before seniors were fully using the new benefit. Later estimates consider a 10-year span after the program has been fully implemented.59 The Bush Administration in mid-2006 reported that lower-than-expected plan premiums and decisions by beneficiaries to enroll in the lowest-premium plans have reduced total estimated costs by nearly $180 billion (or 20 percent of the most recent administration estimate - $926 billion for the period 2006-2015).60

As plans report their actual first-year results, low costs more generally may signify that plans have negotiated low prices and managed drug utilization successfully, but can also result from low enrollment or the failure of beneficiaries to fill needed prescriptions.  Policy makers will undoubtedly look at indicators of quality, such as whether beneficiaries receive needed drugs and whether their use of services is inappropriately reduced.

Prospects for 2007 and Beyond
In the short term, Congress may consider making changes to the late-enrollment penalty61 or address the concerns of some pharmacies that they are not being paid on a timely basis.62  Advocates are urging Congress to consider more transition protections for dual eligibles, a first-year need that could be repeated if changes to plan premiums force many low-income beneficiaries to be assigned to new plans, or to eliminate the asset test for eligibility for the low-income subsidy).63 

Some lawmakers may also push for stronger guidelines for formulary adequacy, or steps to reduce beneficiary confusion through greater standardization of plans’ benefits and procedures.64 In addition, some members of Congress want to grant the Secretary negotiating authority over drug prices,65 or reduce the coverage gap.66 
     
The projected cost of the Medicare Part D benefit was a major political issue surrounding enactment of the MMA, and actual costs will have a huge impact on the benefit’s future.  Some fiscal conservatives have already proposed repealing Part D because of its high costs,67 while others have revived prior proposals to restrict it to low-income beneficiaries.68  On the other side of the political spectrum, policy leaders may push proposals to integrate the drug benefit into the broader Medicare package69 or to create a government plan option.70
     
On November 15, 2006, beneficiaries will once again be able to enroll in Part D or switch plans (effective January 1, 2007).71  In advance of that date, several questions will be answered: Will the same plans be offered?  Will premiums go higher?  Will plan formularies become more restrictive?  The 2006 open season will include some new enrollees and some who switch to different plans.  Both CMS and the plans should be in a better position to avoid the initial problems faced in January 2006, when some beneficiaries could not get their prescriptions filled at the correct price. 

Some experts believe that significant market consolidation might wait until 2008, after plans have been able to see a full year’s claims experience and after some of the initial financial protections begin to phase out.72  It remains to be seen what impact such consolidation would have on access to prescription drug coverage, quality of coverage and costs for beneficiaries.

Even sooner than the end of 2006, new problems could arise as more beneficiaries hit the coverage gap and may be startled when they are billed full price for a prescription they have been getting for a $15 copayment.  Similarly, beneficiaries who are prescribed new drugs may run into denials of coverage for the first time if the drug is off formulary or requires prior authorization. 

Conclusion
Policymakers will have at least some indicators of Medicare Part D’s success within the first year of the program, and beneficiaries’ reactions to the benefit could play an important role in the 2006 congressional elections. Other signs of success or failure will only be available after a full year, when various types of data can be collected and made available to Congress and the public. As is true for many complex public policy issues, political decisions may have to be made more quickly than data can be collected and analyzed. One thing is certain: Medicare Part D will continue to receive considerable attention from researchers, journalists, beneficiaries, and policymakers.

Story Ideas

  • When new plan offerings are announced, beneficiaries face an open season for the year to come.  What organizations are leaving the program in your area and why?  For organizations that are staying in the program, are they modifying their plan offerings?  How many “dual eligibles” (enrolled in both Medicare and Medicaid) will have to change plans for 2007?  Are premiums lower or higher, and by how much?  How many beneficiaries in general will need to switch to new plans?
  • Does your state have a state pharmacy assistance program (SPAP) in 2006?  How many enrollees are getting coverage through it?  How smooth has coordination been between the SPAP and the Part D benefit?  Are there any new issues facing these programs or are further program changes expected in 2007?
  • Are beneficiaries still having problems getting access to needed drugs?  To what extent have beneficiaries needed to request exceptions or request prior authorization?  How hard has this process been for beneficiaries?  For pharmacists and physicians? 
  • How are beneficiaries handling their costs as they reach the coverage gap?  Does the gap come as a surprise, or were they prepared for it?  Are they cutting back on needed medications?
  • Plans report quarterly to the government on such topics as call center performance, generic drug dispensing rates, use of the exceptions and appeals processes, etc.  Are those figures being made available?  How do plans in your area compare on these measures?  What implications does this have for educating beneficiaries during the next open enrollment season?
  • What has been the experience of counselors – those who are part of the state counseling (“SHIP”) program, members of the ABC coalition, or others – in working with beneficiaries?  What lessons can they offer for future years?  What challenges have they faced? What resources do they have available?
  • States now pay directly for lesser amounts of drugs through Medicaid, because Medicare now finances drugs for those enrolled in both programs.  Has this affected the state’s bargaining power with drug companies for the drugs they still buy?  Is the state making its “clawback” payment to the federal government, to compensate for its lowered drug costs?  Does your state consider the payment to be the fair amount?

Experts and Websites

Analysts/Advocates
Antos, Joseph, Wilson H. Taylor Scholar in Health Care and Retirement Policy, American Enterprise Institute, 202/862-5938
Benoff, Marc, Director and Practice Leader, IMS Health, 610/832-5828 
Biles, Brian, Professor, Department of Health Policy, George Washington University, 202/416-0066
Carino, Tanisha, Director, Center on Evidence-Based Medicine, Avalere Health, 202/207-3677
Cauchi, Richard, Senior Policy Specialist, Health Program, National Conference of State Legislatures, 303/364-7700
Claxton, Gary, Vice President/Director, Health Care Marketplace Project, Kaiser Family Foundation, 202/347-5270
Evans, Richard, Senior Analyst, Bernstein Investment Research and Management, 212/407-5901
Feder, Judy, Professor and Dean, Public Policy Institute, Georgetown University, 202/687-8397
Findlay, Steve, Managing Editor, Consumer Reports Best Buy Drugs, Consumers Union, 202/462-6262
Firman, James, President and CEO, National Council on Aging, 202/479-1200
Frank, Richard, Margaret T. Morris Professor of Health Economics, Harvard Medical School, Harvard University, 617/432-0178
Fronstin, Paul, Senior Research Associate, Employee Benefit Research Institute, 202/775-6352
Gottlich, Vicki, Senior Policy Attorney, Center for Medicare Advocacy, 202/216-0028 x103
Guterman, Stuart, Senior Program Director, Program on Medicare's Future, The Commonwealth Fund, 202/692-6735
Hash, Michael, Principal, Health Policy Alternatives, 202/737-3390
Hayes, Robert, President, Medicare Rights Center, 212/869-3850 x15
Hoadley, Jack, Research Professor, Health Policy Institute, Georgetown University, 202/687-0880
Hutchinson, Bernice, Director, Family Caregiver Support Project, National Association of State Units on Aging, 202/898-2578
Jennings, Chris, President, Jennings Policy Strategies, 202/879-9344
Kennelly, Barbara, President and CEO, National Committee to Preserve Social Security and Medicare, 202/216-0420
Lambrew, Jeanne, Associate Professor of Health Policy, George Washington University, 202/416-0479
Laszewski, Robert, President, Health Policy and Strategy Associates, 703/727-9517
Levitt, Larry, Vice President, Kaiser Family Foundation, 650/854-9400
Matheis, Cheryl, Director of Health Strategies, AARP, 202/434-3948
McManus, John, President, The McManus Group, 202/548-2317
Mendelson, Dan, Founder and President, Avalere Health, 202/207-1310
Moffit, Robert, Director, Center for Health Policy Studies, The Heritage Foundation, 202/546-4400
Moon, Marilyn, Vice President and Director of the Health Program, American Institutes for Research, 202/403-5000
Morrisey, Patrick, Partner, Sidley Austin Brown & Wood, 202/736-8228
Neuman, Tricia, Director, Medicare Policy Project, Kaiser Family Foundation, 202/347-5270
Pollack, Ron, Executive Director, Families USA, 202/628-3030
Raetzman, Susan, Associate Director, Public Policy Institute, AARP, 202/434-3844
Reinhard, Susan, Professor and Co-Director, Center for State Health Policy, Rutgers University, 732/932-3105
Roherty, Martha, Director of Health Policy, Policy and Government Affairs, National Association of State Medicaid Directors, 202/682-0100
Rosen, Dean, Principal, Mehlman, Vogel, Castagnetti, Inc. , 202/585-0209  
Rother, John, Director of Policy and Strategy, AARP, 202/434-3701
Rowland, Diane, Executive Vice President, Kaiser Family Foundation, 202/347-5270
Salisbury, Dallas, President and CEO, Employee Benefit Research Institute, 202/659-0670
Salo, Matt, Director, Health & Human Services Committee, National Governors Association, 202/624-5336
Scala, Steve, Senior Pharmaceuticals Analyst, SG Cowen & Co., 617/946-3923
Scala-Foley, Marisa, Associate Director, Access to Benefits Coalition, 202/479-6976
Shearer, Gail, Director, Health Policy Analysis, Consumers Union, 202/462-6262
Snedden, Tom, Director of the PACE Program, Pennsylvania Department of Aging, 717/787-7313
Stuart, Bruce, Professor and Executive Director of the Peter Lamy Center on Drug Therapy and Aging, University of Maryland, 410/706-5389
Vachon, R. Alexander, President, Hamilton PPB, 202/667-1193
Weil, Alan, Executive Director, National Academy for State Health Policy, 202/903-0101
Wilensky, Gail, Senior Fellow, Project Hope, 301/656-7401
Wilson, Joy Johnson, Federal Affairs Counsel, National Conference of State Legislatures, 202/624-5400

Government
Bailey, Gary, Deputy Director, Center for Beneficiary Choices, Centers for Medicare and Medicaid Services, 410/786-4297
Block, Abby, Director, Center for Beneficiary Choices, Centers for Medicare and Medicaid Services, 202/260-1291
Bradley, Tom, Chief Health Cost Estimates Unit, Congressional Budget Office, 202/226-2602
Disman, Beatrice, Regional Commissioner, New York Region, Social Security, 212/264-3915
Fishman, Linda, Director, Office of Legislation, Centers for Medicare and Medicaid Services, 202/690-5960
King, Kathleen, Director, Healthcare, Government Accountability Office, 202/512-5154
Steinwald, Bruce, Director, Health Care, Economic and Payment Issues, Government Accountability Office, 202/512-7101
Vogelsong, Jack, Statewide SCHIP Coordinator, Pennsylvania Department of Aging, 717/783-8975

Stakeholders
Atkins, Lawrence, Executive Director, Public Policy and Reimbursement, Schering-Plough, 202/463-7372
Barrueta, Anthony, Senior Counsel for Governmental Relations, Kaiser Permanente, 510/271-6835
Blando, Phil, Vice President, Public Affairs, Pharmaceutical Care Management Association, 202/207-3610
Buto, Kathleen, Vice President for Health Policy, Government Affairs, Johnson & Johnson, 202/589-1000
Coster, John, Vice President of Policy and Programs, National Association of Chain Drug Stores, 703/837-4126
Fowler, Elizabeth, Vice President, Public Policy and External Affairs, Wellpoint, 202/628-7844
Fox, Alissa, Vice President, Legislative and Regulatory Policy, Blue Cross Blue Shield Association, 202/626-8618
Gallagher, Joan, Senior Vice President of Corporate Communications, Caremark Rx, Inc., 615-743-6652
Ignagni, Karen, President and CEO, America's Health Insurance Plans, 202/778-3200
Jaeger, Kathleen, President and CEO, Generic Pharmaceutical Association, 703/647-2490
Lindsay, Mark, Director, Public Communications and Strategy, UnitedHealth Group, 952/992-4297
Manasse, Jr., Henri, Executive Vice President and Chief Executive Officer, American Society of Health-System Pharmacists, 301/664-8794
Mihalski, Ed, Director, Federal Affairs, Eli Lilly, 202/434-1020
Smith, Ann, Senior Director of Public Affairs, Medco Health Solutions, 201-269-5984
Spatz, Ian, Vice President, Public Policy, Merck & Company, Inc., 202/638-4170

Websites
AARP - Medicare RX    www.aarp.org/medicareRx
AARP Drug Benefit Calculator    http://sites.stockpoint.com/AARP/drugbenefit.asp
Access to Benefits Coalition    www.accesstobenefits.org
Aetna      www.aetna.com
Alliance of Community Health Plans    www.achp.org
American Institutes for Research    www.air.org
American Society of Health-System Pharmacists www.ashp.org
American Society on Aging - Medicare   www.asaging.org/medicare/index.cfm
Avalere Health     www.avalerehealth.net
BenefitsCheckUpRx (NCOA)    www.benefitscheckup.org/
Blue Cross Blue Shield Association    www.bcbs.com
Center for Medicare Advocacy    www.medicareadvocaay.org
Center on Budget and Policy Priorities    www.cbpp.org
Centers for Medicare and Medicaid Services  www.cms.hhs.gov
CMS Resources for Partners    www.cms.hhs.gov/partnerships
The Commonwealth Fund    www.cmwf.org
Congressional Budget Office    www.cbo.gov
Consumer Reports Best Buy Drugs    www.crbestbuydrugs.org
Consumers Union     www.consumersunion.org 
Employee Benefit Research Institute    www.ebri.org
Families USA- Medicare Drug Coverage Center www.familiesusa.org/issues/medicare/rx-drug-center/
Generic Pharmaceutical Association    www.ghpaonline.org
George Washington University Department of Health Policy     www.gwhealthpolicy.org
Georgetown University Public Policy Institute  http://gppi.georgetown.edu/welcome.html
Government Accountability Office    www.gao.gov
Harvard Medical School    Department of Health Care Policy    www.hcp.med.harvard.edu
Health Policy and Strategy Associates    www.healthpol.com
The Heritage Foundation    www.heritage.org
Humana - Medicare    www.humana.org
IMS Health    www.imshealth.com
Jennings Policy Strategies    www.jenningsps.com
Kaiser Family Foundation    www.kff.org
Kaiser Family Foundation - Medicare Rx Drug Benefit    www.kff.org/medicare/rxdrugbenefit.cfm
Kaiser Family Foundation Drug Benefit Calculator    www.kff.org/medicare/rxdrugscalculator.cfm
Kaiser Foundation Health Plan Inc.    www.kaiserpermanente.org
The Lewin Group, Drug Calculator    http://webstudies.lewin.com/pdb/medicare2.htm
Medco Health Solutions     www.medcohealth.com
Medicare Rights Center    www.medicarerights.org
Medicare Rx Connect    www.maprx.info
Medicare Rx Education Network    www.medicarerxeducation.org
Medicare Rx Outreach & Education Project   www.medicarerxoutreach.org
Medicare Today     www.medicaretoday.org
Medicare.gov - U.S. Government Site for People with Medicare    www.medicare.gov
Merck & Company, Inc.    www.merck.com
National Academy for State Health Policy  www.nashp.org
National Association of Chain Drug Stores  www.nacds.org
National Association of State Medicaid Directors www.nasmd.org
National Association of State Units on Aging  www.nasua.org
National Committee to Preserve Social Security and Medicare     www.ncpssm.org
National Conference of State Legislatures, Health Program     www.ncsl.org/programs/health/health.htm
National Council on Aging    www.ncoa.org
National Governors Association    www.nga.org
Pennsylvania Department of Aging    www.aging.state.pa.us
Pharmaceutical Care Management Association  www.pcmanet.org
Pharmaceutical Research and Manufacturers of America (PhRMA)    www.phrma.org
Project HOPE      www.projecthope.org
Robert Wood Johnson Foundation    www.rwjf.org
Rutgers Center for State Health Policy    www.cshp.rutgers.edu
Social Security Administration    www.ssa.gov/prescriptionhelp/

Endnotes

a   U.S. Department of Health and Human Services (2006). “Over 38 Million People With Medicare Now Receiving Prescription Drug Coverage.” Press release, June 14.  (http://www.hhs.gov/news/press/2006pres/20060614.html).  Retrieved on July 12, 2006.
b   Kaiser Family Foundation (2006). “Medicare: Prescription Drug Coverage Among Medicare Beneficiaries.” Data Update, June. (http://www.kff.org/medicare/upload/7453.pdf). Retrieved on July 7, 2006.
c   Hoadley, Jack (2006).  “Medicare’s New Adventure: The Part D Drug Benefit.”  The Commonwealth Fund, March, p. 6-7.  (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf).  Retrieved on June 30, 2006.
d  MedPAC (2006).  “Report to the Congress: Increasing the Value of Medicare.”  June, p. 145-146.  (http://www.medpac.gov/publications/congressional_reports/Jun06_Ch07.pdf).  Retrieved on June 30, 2006.
e   Hoadley, Jack et al. (2006).  “An In-Depth Examination of Formularies and Other Features of Medicare Drug Plans.”  Kaiser Family Foundation, April, p. 6.  (http://www.kff.org/medicare/upload/7489.pdf).  Retrieved on June 30, 2006.
f   Kaiser Family Foundation (2006). “Medicare: Prescription Drug Coverage Among Medicare Beneficiaries.” Data Update, June. (http://www.kff.org/medicare/upload/7453.pdf). Retrieved on July 7, 2006.
g   Hewitt Associates (2005).  “Prospects for Retiree Health Benefits as Medicare Prescription Drug Coverage Begins: Findings from the Kaiser/Hewitt 2005 Survey on Retiree Health Benefits.”  Kaiser Family Foundation, December, p. 36-39.  (http://www.kff.org/medicare/upload/7439.pdf).  Retrieved on July 12, 2006.

1   Dept. of Health and Human Services (2003).  “Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.”  April, Executive Summary.  (http://aspe.hhs.gov/health/reports/drugstudy/exec.htm).  Retrieved on June 30, 2006.
2  MedPAC (2003).  “Report to the Congress: Variation and Innovation in Medicare.”  June, p. 150.  (http://www.medpac.gov/publications/congressional_reports/June03_Ch9.pdf).  Retrieved on June 30, 2006.
3  Washington Drug Letter (2004). “CBO Repeats Cost Estimate of Medicare Drug Law.” Washington Business Information, July 26. (http://www.fdanews.com/wdl/36_29/fda/27370-1.html). Retrieved on July 7, 2006.
4  Dept. of Health and Human Services (2006). “Over 38 Million People With Medicare Now Receiving Prescription Drug Coverage.” Press release, June 14.
5  Kaiser Family Foundation (2006). “Medicare: Prescription Drug Coverage Among Medicare Beneficiaries.” Data Update, June. (http://www.kff.org/medicare/upload/7453.pdf). Retrieved on July 7, 2006.
6  Dept. of Health and Human Services (2006). “Over 38 Million People With Medicare now Receiving Prescription Drug Coverage.” Press release, June 14. (http://www.hhs.gov/news/press/2006pres/20060614.html). Retrieved on July 5, 2006.
7  McClellan, Mark (2006).  Testimony before the House Committee on Ways and Means, June 14. (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4992).  Retrieved on June 30, 2006; Kaiser Family Foundation (2006). “Medicare: Prescription Drug Coverage Among Medicare Beneficiaries.” Data Update, June. (http://www.kff.org/medicare/upload/7453.pdf). Retrieved on July 7, 2006.
8  Kaiser Family Foundation (2006). “Medicare: The Medicare Prescription Drug Benefit.” Fact Sheet, June. (http://www.kff.org/medicare/upload/7044-04.pdf). Retrieved on July 7, 2006.
9  CBO (2004). “A Detailed Description of CBO’s Cost Estimate for the Medicare Prescription Drug Benefit.” July. (http://www.cbo.gov/showdoc.cfm?index=5668&sequence=0). Retrieved on July 5, 2006.
10  Hoadley, Jack (2005). “The Effect of Formularies and Other Cost Management Tools on Access to Medications: An Analysis of the MMA and the Final Rule.” March, p. 2, 5. (http://www.kff.org/medicare/7160.cfm). Retrieved on July 7, 2006.
11  Hoadley, Jack (2006).  “Medicare’s New Adventure: The Part D Drug Benefit.”  The Commonwealth Fund, March, p. 4, 11.  (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf).  Retrieved on July 12, 2006; Adelberg, Mike (2005). “Medicare Part D Plan Training: Marketing Guidelines Overview.” Presentation at the CMS Medicare Part D Marketing Guideline Training Conference, June 3, 2005. (http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/mktgtrng_06.03.05.pdf). Retrieved on August 1, 2006.
12  Kaiser Family Foundation (2006). “Medicare: The Medicare Prescription Drug Benefit.” Fact Sheet, June. (http://www.kff.org/medicare/upload/7044-04.pdf). Retrieved on July 7, 2006; CMS (2006). “Find a Medicare Prescription Drug Plan.” June. (http://www.medicare.gov/MPDPF/Shared/Static/Resources.asp?dest=Nav%7CHome%7CResources%7CResources). Retrieved on July 7, 2006; In 2007, the benefit amounts will increase according to various indexing rules in the MMA.  The 2007 deductible will be $265; the initial coverage limit will be $2,400, and the out-of-pocket limit will be $3,850 (equivalent to $5451.25 under the standard benefit).  In addition, some of the copayment amounts are indexed, so that copayments for catastrophic coverage are the greater of 5 percent of the cost of the drug or $2.15 (generics) or $5.35 (brands), and copayments for low-income beneficiaries can go as high as $5.35.  See: CMS (2006). “Medicare Part D Benefit Parameters for Standard Benefit: Annual Adjustments for 2007.” May. (http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/downloads/2007_
Part_D_Parameter_Update.pdf
).  Retrieved on June 30, 2006.
13  Hoadley, Jack (2006). “Medicare’s New Adventure: The Part D Drug Benefit.” The Commonwealth Fund, March, p. 5, 13. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf).  Retrieved on July 12, 2006.
14  MedPAC (2006). “Report to Congress: Increasing the Value of Medicare.” June, 152. (http://www.medpac.gov/publications/congressional_reports/Jun06_EntireReport.pdf). Retrieved on July 24, 2006.
15  Dept. of Health and Human Services (2006). “Over 38 Million People With Medicare now Receiving Prescription Drug Coverage.” Press release, June 14. (http://www.hhs.gov/news/press/2006pres/20060614.html). Retrieved on July 5, 2006.
16  Hoadley, Jack (2006). “Medicare’s New Adventure: The Part D Drug Benefit.” The Commonwealth Fund, March, p. 5. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf).  Retrieved on July 12, 2006; Dept. of Health and Human Services (2006). “Prior HHS Poverty Guidelines and Federal Register References.” (http://aspe.hhs.gov/poverty/figures-fed-reg.shtml). Retrieved on July 6, 2006.
17  Revised health spending data have reduced the estimated amounts that states will pay by about 10 percent. See: Kaiser Commission on Medicaid and the Uninsured (2006).  “An Update on the Clawback: Revised Health Spending Data Change State Financial Obligations for the New Medicare Drug Benefit.”  March, p. 1.  (http://www.kff.org/medicaid/upload/7481.pdf).  Retrieved on June 30, 2006.
18  Schneider, Andy (2004).  “The ‘Clawback’: State Financing of Medicare Drug Coverage.”   Kaiser Commission on Medicaid and the Uninsured, June, p. 1. (http://www.kff.org/medicaid/upload/The-Clawback-State-Financing-of-Medicare-Drug-Coverage.pdf).  Retrieved on June 30, 2006.
19  Freking, Kevin (2006). “States Considering Medicare Options after Rejection from Supreme Court.” Boston Globe, June 19. (http://www.boston.com/news/local/new_hampshire/articles/2006/06/19/states_
considering_medicare_options_after_rejection_from_supreme_court/
). Retrieved on July 24, 2006; State and Local Government Law Prof Blog (2006). “States Seek Redress on Medicare Clawback.” March 10. (http://lawprofessors.typepad.com/statelocal/2006/03/states_seek_red.html). Retrieved on July 12, 2006.
20  Schneider, Andy (2004). “The ‘Clawback’: State Financing of Medicare Drug Coverage.”   Kaiser Commission on Medicaid and the Uninsured, June, p. 6. (http://www.kff.org/medicaid/upload/The-Clawback-State-Financing-of-Medicare-Drug-Coverage.pdf). Retrieved on June 30, 2006.
21 There are five regions for the territories.  Of the national plans, only United Healthcare offers plans in all five territories. See Hoadley, Jack (2006).  “Medicare’s New Adventure: The Part D Drug Benefit.”  The Commonwealth Fund, March, p. 6, 21.  (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf).  Retrieved on July 12, 2006.
22 CMS has requested that organizations offer only two plan options in 2007 unless one of the options covers drugs in the coverage gap as an enhanced benefit. See: CMS (2006). “CMS Commitment to Continuous Quality Improvement Drives Requirements and Expectations for 2007 Prescription Drug Plans.” Press release, April 3. (http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1826). Retrieved on August 1, 2006. 
23 Beneficiaries in Alaska and Hawaii had 27 and 29 options, respectively.  See Hoadley, Jack (2006).  “Medicare’s New Adventure: The Part D Drug Benefit.”  The Commonwealth Fund, March, p. 7.  (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf).  Retrieved on July 12, 2006.
24 The data released by CMS as of this writing do not report on plans with low enrollment.  In addition, they do not include enrollment numbers for the individual plan options offered by an organization. For CMS raw data see: http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/02_EnrollmentData.asp.
25 Pear, Robert (2006). “In Scramble for New Medicare Business, a Few Insurers Grab the Most.” The New York Times, April 29. (http://www.nytimes.com/2006/04/29/washington/29medicare.html?ex=1303963200&en=709a91c9bd6a0561&ei=5088&partner=rssnyt&emc=rss). Retrieved on July 24, 2006.  For CMS raw data see: http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/02_EnrollmentData.asp.
26 CMS (2005). “Top PDP Plans by Number Enrolled (v04.27.06) [Excel, zip, 5KB].” November. (http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/02_EnrollmentData.asp). Retrieved on July 24, 2006; MedPAC (2006). “Report to Congress: Increasing the Value of Medicare.” June, 157. (http://www.medpac.gov/publications/congressional_reports/Jun06_EntireReport.pdf). Retrieved on July 24, 2006.
27 These qualifying plans cannot offer enhanced benefits. If they do, beneficiaries must pay for the value of the enhanced benefit even if the premium is lower than the benchmark. See: MedPAC (2006). “Report to Congress: Increasing the Value of Medicare.” June, 152. (http://www.medpac.gov/publications/congressional_reports/Jun06_EntireReport.pdf). Retrieved on July 24, 2006.  Note that this is not specifically stated in the source; however, it is the implication since beneficiaries are always required to pay extra for enhanced benefits.
28 MedPAC (2006). “Report to Congress: Increasing the Value of Medicare.” June, 152. CMS announced on June 8, 2006, that it would not use enrollment weights to calculate average premiums for the 2007 benchmarks.  This will lead to higher benchmarks and mean that more plans will be available at a zero premium for beneficiaries who qualify for the low-income subsidy.  See: CMS (2006). “Medicare Demonstration to Transition Enrollment of Low Income Subsidy Beneficiaries.” Letter to Part D Plan Sponsors and MA Organizations, June 8. (http://www.cms.hhs.gov/States/Downloads/TransitionDemoforLIS.pdf). Retrieved on July 24, 2006.
29 Hoadley, Jack (2006). “Medicare’s New Adventure:  The Part D Drug Benefit.” The Commonwealth Fund Commission on a High Performance Health System, March 2006, p. 7-8. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf). Retrieved on July 12, 2006. Also, data on which plans are available without a premium for subsidy-eligible beneficiaries can be found at http://www.medicare.gov/medicarereform/map.asp.  Data on benchmarks can be found at http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/
30  MedPAC (2006). "Report to the Congress: Increasing the Value of Medicare." June, p. 155, 156, 159. (http://www.medpac.gov/publications/congressional_reports/Jun06_Ch07.pdf) and Hoadley, Jack et al. (2006). "An In-Depth Examination of Formularies and Other Features of Medicare Drug Plans." Kaiser Family Foundation, April, p. 10-11. (http://www.kff.org/medicare/upload/7489.pdf).
31 Figures cited are for plans with a three-tier structure (with or without a specialty tier) and for those not offering enhanced benefits.
32 Hoadley, Jack et al. (2006). “An In-Depth Examination of Formularies and Other Features of Medicare Drug Plans.” Kaiser Family Foundation, April, p. 10-11. (http://www.kff.org/medicare/upload/7489.pdf). Retrieved on July 28, 2006.
33 SSA 1860D-11(e)(2)(D)(i) (2006). Compilation of the Social Security Laws. Social Security Online, June. (http://www.ssa.gov/OP_Home/ssact/title18/1860D11.htm). Retrieved on July 28, 2006.
34 Hoadley, Jack (2005).  “The Effect of Formularies and Other Cost Management Tools on Access to Medications: An Analysis of the MMA and the Final Rule.”  Kaiser Family Foundation, March, p. 1-2.  (http://www.kff.org/medicare/upload/The-Effect-of-Formularies-and-Other-Cost-Management-Tools-on-Access-to-Medications-An-Analysis-of-the-MMA-and-the-Final-Rule-Issue-Brief.pdf).  Retrieved on June 30, 2006.
35 Hoadley, Jack et al. (2006).  “An In-Depth Examination of Formularies and Other Features of Medicare Drug Plans.”  Kaiser Family Foundation, April, p. 1, 7. (http://www.kff.org/medicare/upload/7489.pdf).  Retrieved on June 30, 2006; Hoadley, Jack (2006). “Medicare’s New Adventure:  The Part D Drug Benefit.” The Commonwealth Fund Commission on a High Performance Health System, March 2006, p. 9-10. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf). Retrieved on July 12, 2006. 
36 Hoadley, Jack (2006). “Medicare’s New Adventure:  The Part D Drug Benefit.” The Commonwealth Fund Commission on a High Performance Health System, March 2006, p. 10. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf). Retrieved on July 12, 2006. 
37 Hoadley, Jack et al. (2006).  “An In-Depth Examination of Formularies and Other Features of Medicare Drug Plans.”  Kaiser Family Foundation, April, p. 6.  (http://www.kff.org/medicare/upload/7489.pdf).  Retrieved on June 30, 2006.
38 Hoadley, Jack (2005).  “The Effect of Formularies and Other Cost Management Tools on Access to Medications: An Analysis of the MMA and the Final Rule.” Kaiser Family Foundation, March, p. 3. (http://www.kff.org/medicare/upload/The-Effect-of-Formularies-and-Other-Cost-Management-Tools-on-Access-to-Medications-An-Analysis-of-the-MMA-and-the-Final-Rule-Issue-Brief.pdf).Retrieved June 30, 2006.
39 Hoadley, Jack et al. (2006).  “An In-Depth Examination of Formularies and Other Features of Medicare Drug Plans.”  Kaiser Family Foundation, April, p. ii.  (http://www.kff.org/medicare/upload/7489.pdf).  Retrieved on June 30, 2006.
40 McClellan, Mark (2006). Testimony before the House Committee on Ways and Means. June 14. (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4992). Retrieved on July 3, 2006.  Similarly, beneficiaries receiving drug coverage through the Veterans Administration or Tricare have been able to maintain their current coverage.
41 Hoadley, Jack (2006). “Medicare’s New Adventure:  The Part D Drug Benefit.” The Commonwealth Fund Commission on a High Performance Health System, March 2006, p. 11. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf). Retrieved on July 12, 2006.  ; Hinden, Stan (2005). “Medicare’s Part D as Plan B.” Washington Post, November 13. (http://www.washingtonpost.com/wp-dyn/content/article/2005/11/12/AR2005111200173.html). Retrieved on August 1, 2006.
42 Kaiser Family Foundation (2006). “Medicare: Prescription Drug Coverage Among Medicare Beneficiaries.” Data Update, June. (http://www.kff.org/medicare/upload/7453.pdf). Retrieved on July 7, 2006.
43 Hoadley, Jack (2006). “Medicare’s New Adventure:  The Part D Drug Benefit.” The Commonwealth Fund Commission on a High Performance Health System, March 2006, p. 12. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf). Retrieved on July 12, 2006.  I deleted this number because I could not find it anywhere… only as an uncited footnote in “Medicare’s Adventure.”
44 Kaiser Family Foundation (2006). “Low-Income Assistance Under the Medicare Drug Benefit.” Medicare Fact Sheet, May. (http://www.kff.org/medicare/upload/7327.pdf). Retrieved on July 31, 2006.
45 CMS (2005). “Ensuring an Effective Transition of Dual Eligibles from Medicaid to Medicare Part D.” Press release, December 1. (http://www.cms.hhs.gov/apps/media/press/release.asp?counter=1736). Retrieved on July 31, 2006.
46 MedPAC (2006). “Report to the Congress: Increasing the Value of Medicare.” June 2006, p 146 (http://www.medpac.gov/publications/congressional_reports/Jun06_Ch07.pdf). Retrieved on June 30, 2006
47 Hoadley, Jack (2006). “Medicare’s New Adventure:  The Part D Drug Benefit.” The Commonwealth Fund Commission on a High Performance Health System, March 2006, p. 12. (http://www.cmwf.org/usr_doc/Hoadley_medicaresnewadventure_911.pdf). Retrieved on July 12, 2006. CMS estimates that about 1.2 million beneficiaries are new enrollees in Medicare.  It is likely that some beneficiaries also dropped their MA enrollment because they could get drug coverage from a stand-alone PDP. See: McClellan, Mark (2006). Testimony before the House Committee on Ways and Means. June 14. (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4992). Retrieved on July 3, 2006. 
48 CMS (2006). “Do You Have a Medigap Policy with Prescription Drug Coverage?” May. (http://www.medicare.gov/Publications/Pubs/pdf/11113.pdf). Retrieved on July 31, 2006.
49 Williams, Claudia, et al (2005). “State Pharmacy Assistance Programs at a Crossroads:  How Will They Respond to the Medicare Drug Benefit?” AcademyHealth, July 2005, p. 1, 8. (http://www.hcfo.net/pdf/brief0705.pdf).  Retrieved on July 3, 2006.  In some states, beneficiaries have the option of continuing to receive creditable coverage from an SPAP.  A forthcoming paper will highlight final state decisions in this area.
50 National Conference of State Legislatures (2006). “State Pharmaceutical Assistance Programs in 2006: Helping to Make Medicare Part D Easier and More Affordable.” July. (http://www.ncsl.org/programs/health/SPAPCoordination.htm). Retrieved on July 31, 2006.
51 Individuals who first become eligible for Medicare after December 31, 2005, have until three months after their date of eligibility to enroll before they are subject to a late enrollment penalty.  Also, CMS has indicated that beneficiaries eligible for the low-income subsidy can enroll without penalty during 2006. See: Center for Medicare Advocacy (2006). “Coping with the Medicare Part D Enrollment Deadline.” CMA Weekly Alert, May 11. (http://www.medicareadvocacy.org/PartD_06_05.11.EnrollmentDeadline.htm). Retrieved on July 31, 2006; AARP (2006). “What You Need to Know: The New Medicare Prescription Drug Coverage.” (http://www.aarp.org/health/medicare/drug_coverage/medicarepdf7.html). Retrieved on July 31, 2006.
52 MedPAC (2006). “Report to the Congress: Increasing the Value of Medicare.” June 2006, p 186. (http://www.medpac.gov/publications/congressional_reports/Jun06_Ch08.pdf). Retrieved July 3, 2006; CalMedicare.org (2005). “Medicare Prescription Drug Coverage Overview.” December. (http://www.calmedicare.org/drugs/mpdc/overview.html). Retrieved on July 31, 2006.
53 MedPAC (2006). “Report to the Congress: Increasing the Value of Medicare.” June 2006, p 183, 185, 189, 192. (http://www.medpac.gov/publications/congressional_reports/Jun06_Ch08.pdf). Retrieved July 3, 2006.
54 McClellan, Mark (2006). Testimony before the House Committee on Ways and Means. June 14. (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4992). Retrieved on July 3, 2006. 
55 McClellan, Mark (2006). Testimony before the House Committee on Ways and Means. June 14. (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4992). Retrieved on July 3, 2006.  These numbers do not include individuals estimated to be eligible for the low-income subsidy, but who have other sources of creditable coverage.
56 Kaiser Family Foundation (2006). “Medicare: Prescription Drug Coverage Among Medicare Beneficiaries.” Data Update, June. (http://www.kff.org/medicare/upload/7453.pdf). Retrieved on July 7, 2006.
57 Medicare Rx Education Network (2006). “Survey Assesses New Medicare Drug Program.” Press release, April 3. (http://www.medicarerxeducation.org/survey/Survey_PR_04_03_06.htm). Retrieved on July 12, 2006.
58 Washington Drug Letter (2004). “CBO Repeats Cost Estimate of Medicare Drug Law.” Washington Business Information, July 26. (http://www.fdanews.com/wdl/36_29/fda/27370-1.html). Retrieved on July 7, 2006; Holtz-Eakin, Douglas (2004). “Comparison of CBO and Administration Estimates of the Effect of H.R. 1 on Direct Spending,” Letter to Jim Nussle.  February 2. (http://www.cbo.gov/ftpdocs/49xx/doc4995/OMBDrugLtr.pdf) Retrieved on July 3, 2006.  Various factors account for the difference between the two estimates. 
59 Ceci Connolly and Mike Allen, Washington Post, “Medicare Drug Benefit May Cost $1.2 Trillion, p. A1. (www.washingtonpost.com/wp-dyn/articles/A9328-2005Feb8.html)
60 McClellan, Mark (2006). Testimony before the House Committee on Ways and Means. June 14. (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4992). Retrieved on July 3, 2006; CMS (2006). “Drug Benefit Enrollment Up, Costs Down from Competition and Beneficiary Choices: Lower Costs Support Low Income Beneficiary Options and Strong Competition.” Press release, June 8. (http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1876). Retrieved on July 12, 2006.
61 Congresswoman Nancy Johnson (2006). “AARP Endorses Johnson Bill Waiving Medicare Late Fee: Bipartisan Bill Introduced in U.S. House with 26 Cosponsors.” Press release, May 18. (http://www.house.gov/nancyjohnson/medicarelatefeebill.pdf). Retrieved on July 31, 2006; Senator Chuck Grassley (2006). “Senators Announce Bipartisan Bill to Allow Penalty-Free Enrollment in New Prescription Drug Plan.” Press release, May 16. (http://grassley.senate.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=5063&Month=5&Year=2006). Retrieved on July 31, 2006. 
62 Committee on Finance (2006). “Senators Introduce Bills to Simplify Medicare Drug Benefit, Improve Pharmacy Access and Information.” Press release, April 27. (http://www.senate.gov/~finance/press/Bpress/2005press/prb042706.pdf). Retrieved on July 31, 2006.
63 Novelli, William (2006). “AARP’s Policy Priorities for 2006.” Annual Pre-State of the Union Press Briefing, January 27. (http://www.aarp.org/issues/2006_presotu.html.). Retrieved on July 31, 2006); Ron Pollack (2006). Testimony before the House Committee on Ways and Means. Families USA, June 14. (http://www.familiesusa.org/assets/docs/Families-W-M-testimony-2006June14FINAL.doc). Retrieved on July 31, 2006.
64 Committee on Finance (2006). “Senators Introduce Bills to Simplify Medicare Drug Benefit, Improve Pharmacy Access and Information.” Press release, April 27. (http://www.senate.gov/~finance/press/Bpress/2005press/prb042706.pdf). Retrieved on July 31, 2006.
65 A largely symbolic amendment sponsored by Sen. Olympia Snowe to the fiscal year 2007 budget resolution to provide the Secretary with negotiating authority passed with 54 votes in the Senate on March 16, 2006. See: Senator Olympia J. Snowe (2006). “Snowe-Wyden Measure to Allow HHS Secretary to Negotiate for Prescription Drugs Passes Major Hurdle.” Press release, March 16. (http://snowe.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=c56de984-3676-44e4-b92e-caa5a14864be&Region_id=&Issue_id). Retrieved on July 31, 2006.  
66 Democratic Policy Committee (2006). “The Medicare Drug Benefit’s ‘Donut Hole’ Threatens Financial and Health Security of Vulnerable Seniors.” July. (http://democrats.senate.gov/dpc/dpc-new.cfm?doc_name=fs-109-2-103). Retrieved on July 31, 2006.
67 Cannon, Michael (2004). “Repeal Medicare Drug Entitlement.” Cato Institute, May. (http://www.cato.org/pub_display.php?pub_id=2662). Retrieved on July 31, 2006.
68 Moffitt, Robert E. (2006). “Medicare in Issues 2006: The Candidate’s Briefing Book.” Heritage Foundation. (http://www.heritage.org/Research/features/issues/pdfs/Medicare.pdf). Retrieved on July 31, 2006.
69 Hayes, Robert (2006). “Implementation of Medicare Part D Prescription Drug Benefit.” Testimony before the U.S. House Committee on Ways and Means. June 14. (http://www.medicarerights.org/testimony21.html). Retrieved on August 1, 2006.
70 Burgess, Michael (2006). “Try Standardized Health Coverage.” Global Action on Aging, May 14. (http://www.globalaging.org/health/us/2006/tryit.htm) Retrieved August 25, 2006. 71 AARP (2006). “Key Medicare Dates.” (http://www.aarp.org/health/medicare/drug_coverage/key_medicare_dates_
that_could
_ affect_you.html). Retrieved on July 12, 2006.
72 Arnold, Christine and Douglas Simpson (2006). “11th Annual Wall Street Comes to Washington Conference.”  Testimony before the 11th Annual Wall Street Comes to Washington Conference. June 21. (http://www.hschange.org/CONTENT/854/). Plans are protected by risk-sharing provisions that are loosened starting in 2008.  In 2006 and 2007, plans are only at full risk for spending within 2.5 percent of a target amount.  The government shares in the gains or losses outside that corridor.  As of 2008, the full-risk corridor is set at 5 percent above or below the target amount.

 
Search Sourcebook
Please enter your search word or words below to search the current sourcebook.

Graphics for This Chapter

Endnotes

COST-SHARING DESIGNS FOR STAND-ALONE PRESCRIPTION DRUG PLANS, 2006

RANGE OF PREMIUMS FOR ALL STAND-ALONE PRESCRIPTION DRUGS PLANS, 2006

Shape of the Standard Benefit in 2006

Number and Percentage of Plans Covering Top 10 Brand-Name and Generic Drugs, 2006

Enrollment in Part D and Other Sources of Drug Coverage, June 2006

 

This sourcebook for journalists was made possible with the support of the Robert Wood Johnson Foundation.

Copyright 1997-2014 Alliance for Health Reform
1444 Eye Street, NW, Suite 910 Washington, DC 20005-6573      202-789-2300      202-789-2233 fax      info@allhealth.org      Sitemap