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Medicaid Part D is helping seniors
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Monday will mark the beginning of open enrollment for the Medicare prescription drug benefit. Public officials have already taken steps to streamline the program, otherwise known as Medicare Part D, making it that much easier for seniors to sign up and customize coverage to best fit their medical needs.
Part D administrators expect a flood of new enrollees. Since the program launched in 2006, it has become incredibly popular – according to surveys, about nine in 10 seniors are pleased with Part D. This makes sense. The Medicare drug benefit offers a great deal of choice and has reduced seniors’ out-of-pocket costs.
Even better, the health reform bill improved the benefit by closing the infamous “doughnut hole” that led to gaps in drug coverage.
Right now, beneficiaries who have purchased prescription drug coverage under Part D face a gap in their coverage when total drug spending falls between $2,830 and $6,440. This year, seniors whose spending falls into that hole will get a $250 rebate check. Next year, they’ll only have to pay 50 percent of the cost of brand-name drugs in that gap. That number will decrease every year until 2020, when seniors will have to pay just 25 percent of the cost of brand-name and generic drugs in the gap. That’s the same amount they must pay before they reach the gap.
The Medicare drug benefit is also lauded because it’s one of the few government programs that has cost less than expected.
The Medicare trustees’ report found Part D spending was lower than predicted in 2008 and 2009. They also estimate further spending will grow at a slower rate over the next 10 years than first predicted. This is almost entirely due to the design of Part D.
Unlike the other components of Medicare, Part D beneficiaries get their coverage by voluntarily purchasing plans from private insurers. These private companies compete to get seniors’ monthly premiums – which are subsidized by the government – so they must offer plans that give high value for the dollar. Seniors can choose from a variety of plans to select the one that best fits their needs.
One worrisome component of the health reform bill could hurt Part D. The new law establishes an Independent Payment Advisory Board to recommend cost-costing measures in Medicare. Its members will make recommendations that automatically become law unless Congress overrides them. Yet the board can’t cut costs in its first decade for over half of Medicare providers – including Part A hospital visits and Part B out-patient services. In other words, Part D is one of the few components of Medicare that the board could slash.
Still, just as progress is constantly being made in bringing new life-saving medicines to the patients who most need them, progress is being made in making those medicines more affordable for the patients who most need them. With the removal of the notorious “doughnut hole,” Medicare Part D is now a bipartisan success story.

Blancato is the executive director of the National Association of Nutrition and Aging Services Programs.
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