Undoing the Damage: Medicare Policy Series

By Center for American Progress

How will the president’s new Medicare drug bill affect Americans? It creates a Medicare drug benefit but it also makes major changes to the underlying program and its hundreds of pages include dozens of policies with important and troubling implications. To examine these specific provisions and the problems they create and to explore alternative options for Congress and the administration, American Progress will produce a year-long series of policy briefs, each addressing a single aspect of the bill.

The New Medicare Prescription Drug Law, by Jeffrey S. Crowley, July 20, 2004
A key feature of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) is its reliance on private insurers (stand alone-drug insurers and Medicare Advantage plans) to negotiate drug prices and reduce program costs. One of the major tools that they will use to steer enrollees toward preferred drugs are formularies, or defined lists of drugs for which a prescription drug plan will provide coverage. Formularies have become a common feature of existing private employer-sponsored health insurance programs, as well as Medicaid, the federal-state program that provides health coverage to nearly 53 million low-income individuals.

Developing the Right Approaches to Chronic Care in Medicare, March 19, 2004
As Americans live longer, more of us live with multiple and complex chronic conditions that require a high degree of medical management and monitoring over time and a new commitment to encouraging patient self-management. Medicare has an important opportunity to lead the restructuring of how physicians organize and deliver health services, in order to improve care for these medically complex individuals whose needs drive program spending.  The attached policy brief, authored by Jane Horvath and Robert Berenson, examines the new law's approach to chronic care improvement.  It concludes that the law merely follows private sector approaches that may not be well suited to the Medicare population.  The brief offers options for better meeting the needs of beneficiaries with chronic conditions by engaging front lines of health care utilization and quality – doctors and other health care professionals.

The New Medicare Prescription Drug Benefit: Not So Voluntary, February 13, 2004
An administration-sponsored flyer states that, under the recently-enacted drug benefit, "Enrolling is your choice." However, little-noticed provisions of the new Medicare law will make enrollment, for some, a "now or never" decision. Beneficiaries who delay enrollment or temporarily leave Medicare drug plans could face steep financial penalties upon enrollment or be allowed to enroll only at certain times of the year. Thus, the "choice" to not enroll in the new drug benefit could be costly and, for some, no choice at all.

Prescription Drug Prices: Harnessing Medicare’s Purchasing Power, January 28, 2004
The Medicare program is huge and its leaders could use its size to bargain for lower prices, but instead of doing that, the new Medicare law uses multiple private plans in multiple regions to negotiate separately with pharmaceutical manufacturers over prescription drug prices. The law also prohibits Medicare from "interfering" with these negotiations or directly negotiating with pharmaceutical manufacturers on behalf of all Medicare beneficiaries. This report discusses the ramifications of these provisions and offers legislative options for establishing Medicare drug price negotiations.


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