What is the Modenization Act of 2003 (MMA)?

What is Medicare?

Who Will Administer Part D Benefits?

What is Cost-Sharing?

Will Assisted Living Residents have cost-Sharing Responsibilities?

What is the Modernization Act of 2003 (MMA)?

The Medicare drug benefit was enacted in 2003 by the U.S. Congress as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). On January 1, 2006, the new Medicare drug benefit will begin. Prior to the MMA, the Medicare program covered services like: hospital inpatient stays, short-term nursing facility stays, doctor visits, and durable medical equipment. The Centers for Medicare and Medicaid Services (CMS) is the agency responsible for implementing and monitoring the Medicare program and the new Medicare drug benefit. CMS is working to supply specific instructions for stakeholders on how the new drug benefit will be implemented. However, there are still many uncertainties about the benefit at this time.   Top

What is Medicare?

Medicare is a Federal health insurance benefit for the elderly (those over age 65), those with permanent disability, and those with end stage renal disease (kidney failure). Medicare is a separate program from Medicaid with different participation requirements.   Top

Who Will Administer Part D Benefits?

The outpatient drug benefit will be administered by private health plans, managed care organizations, and pharmacy benefit managers, also known as PBMs. The benefit is voluntary for Medicare beneficiaries, who if choosing to participate, must sign up with one of the health plans offering the benefit in their region. Enrollment officially begins November 15, 2005, and extends through May 15, 2006. Medicare beneficiaries may enroll in a plan that only offers drug coverage under the new benefit; these plans are called “prescription drug plans (PDPs).” Or, Medicare beneficiaries may choose to enroll in a plan that offers both a medical and a drug benefit; these plans are known as Medicare Advantage (MA) Plans. Currently, there are only about 10% of medical beneficiaries enrolled in these managed care plans, with few enrollees in nursing homes.

All people who currently have both Medicaid and Medicare (also known as dual-eligibles) will switch from Medicaid drug coverage to Medicare drug coverage through a prescription drug plan. For dually eligible individuals, enrolling in the new Medicare drug program is mandatory. Initially, CMS will enroll only dually eligible individuals in a drug plan. This process is called “auto-enrollment.” It began in October. However, at any time during the year, a dual eligible, or any beneficiary in a nursing home, may switch from one drug plan to another.

Because the drug benefit is administered by private health plans and PBMs, each plan will offer a unique product to beneficiaries. At this time, we do not know how each plan will structure its benefit. For example, plans can have different copay amounts, different formularies, and different exceptions and appeals processes. As part of our new service, KPS Pharmacy will work to provide you with the necessary information to understand this new drug benefit as it unfolds in 2005 and 2006.   Top

What is Cost-Sharing?

The drug benefit will require most enrollees to pay some cost-sharing, which is typical of the Medicare program in general. Most beneficiaries will have to pay monthly premiums, plus a deductible and copays when filling a prescription. Many beneficiaries will qualify for some financial assistance with their drug costs, which means that CMS will pay some or all of the premiums, deductibles, and copays to the drug plans on behalf of the beneficiaries. All people who currently have both Medicaid and Medicare (the dual-eligibles) will have much of their drug costs paid for by CMS. For example, dual-eligibles in the nursing home will have no out-of-pocket costs for drugs.   Top

Will Assisted Living Residents have cost-Sharing Responsibilities?

There are some important differences between how residents in nursing homes and those living in assisted living or at home will receive the Medicare drug benefit. Check out our Medicare Drug Benefits Fast FAQs page for more information.   Top