Medicare Moderization Act

Medicare was introduced in 1965 as an essential health care plan for people who are 65 years of age or older. Over the criteria for Medicare coverage has been expanded to those who qualify for Social Security disability and for people who suffer from End Stage Renal Disease requiring dialysis. Beginning in 2004 the act adds new befits and coverage to Medicare until 2006 when it is fully operational.

• 2004
  Drug Discount Cards
  Beginning with sign up in May 2004, Medicare has contracted with numerous private companies to offer prescription drug discount cards. These cards will be in effect until 2006 when Medicare prescription drug coverage begins.

  The cards have been met with limited acceptance with estimates of less than half of those eligible for coverage applying for the cards. Critics cite the sign-up process as confusing and cumbersome with limited if any real savings. For those who have signed up the cards are intended to offer anywhere from 10 - 25 % savings on prescription drugs.

  Low income (less than %12,569 for single and 416,862 for married couple) may qualify for a $600 credit for prescription drugs. This is a more detailed application with a means test.

  Medicare Advantage
  Medicare has encouraged private insurers to once again offer and expand coverage of Medicare managed care plans by increasing the reimbursement for coverage they pay. This has increased the offerings from the private sector.

• 2005
  Preventive Benefits
  Beginning in 2005 Medicare will now cover a one-time initial physical exam screening. It must be done within 6 months of the day of enrollment in Medicare Part B and is only for those who are new to Medicare. The screening tests covered include the addition of blood tests for early detection of heart disease and diabetes screening tests. All existing preventive benefits remain intact.
• 2006
  Prescription Drug Plan
  In 2006 the Medicare Discount card program will end as this part of the act comes into effect. Anyone with Medicare coverage will be eligible to sign up.
  • Beneficiaries will have a choice of plans with an estimated monthly premium of about $35.00 (about $420/year).
  • Beneficiaries will pay a deductible of $250 per year (they will pay out of pocket for the first $250 in drug costs)
  • Medicare will pay 75% of drug costs for drug spending between $250 and $2,250.
  • If your spending for drug costs reaches above $2,250 you will then pay %100 of the costs until your out-of-pocket spending for drugs reaches $3,600.
  • After you have spent out-of-pocket costs of $3,600 for prescription drugs Medicare will pay about 95% of of the costs.
  • Some plans may offer additional options to help pay the out-of-pocket costs.
  • Low income individuals will get additional help in paying for drugs with waivers of premium or deductibles depending on income and need. The rules and income levels for this will be set in 2005.
• Medicare Advantage
  Plan choices are expected to expand with the inclusion of preferred provider organization plans for coverage. The details are not available at this time for this coverage.

All options provided by this act are voluntary. If a Medicare beneficiary has prescription drug coverage through an employee retirement benefit or through Tricare for Life (for retired military) they will not want to sign up for either the drug discount card or the Prescription Drug Plan.