HHS Proposes New Rules to Deliver Better Benefits and Savings on Drugs for Medicare Beneficiaries and Urges Public Comment

The United States Department of Health & Human Services (HHS) announced on July 26th the proposed regulations to deliver on a new law that provides better benefits – including prescription drug savings of more than 50 percent for the average senior without coverage – and improved access to health care services through Medicare.

The proposed regulations, which are now available for public comment, implement the essence of the Medicare Modernization Act that creates a new voluntary prescription drug benefit under Medicare, as well as new health plan choices, improved health care for rural America and improved preventive care benefits.

The new prescription drug benefit will allow all Medicare beneficiaries to enroll in drug coverage through a prescription drug plan or Medicare health plan with Medicare paying for 75% of the premium. Additional benefits for Medicare beneficiaries who have limited means will cover, on average, 95% of their drug costs. The new benefits also will provide new protections for retirees who currently receive drug coverage through their employers or unions. All the new Medicare benefits are voluntary as seniors can choose to keep their existing traditional coverage.

“ We’re delivering on our promise to America’s seniors to provide better benefits and real savings on their prescription drugs,” Secretary Thompson said. “For the first time, all Medicare beneficiaries will have access to prescription drug coverage. Seniors currently without coverage could see their drug costs cut by more than half, with lower-income seniors getting even greater savings.”

The Medicare Prescription Drug Benefit is a key element of the Medicare Modernization Act signed into law on Dec. 8, 2003. The Centers for Medicare & Medicaid Services (CMS) also proposed rules to implement another key element of the law: strengthening and improving the Medicare Advantage program, including making regional preferred provider organizations (PPOs) available to all Medicare beneficiaries. These provisions will give beneficiaries broad and more secure access to coordinated-care health plans that provide additional benefits and significantly lower out-of-pocket costs. Though over 60 million Americans in all 50 states including rural areas get their health insurance coverage through PPOs today, they have generally not been available to Medicare beneficiaries. The proposed rules would also implement new, less costly options for Medigap coverage.

“ As we move closer to providing affordable drug coverage, access to popular health plans, and more secure retirement coverage, we need input from the public,” said CMS Administrator Mark B. McClellan, MD, PhD. “We are taking special steps to encourage comments and dialogue on these proposed rules, and implement them together, to assure that the key elements of the new law work together to give seniors and people with disabilities the best Medicare possible.”

The rule will be published in the Federal Register on Aug. 3, 2004. The comment period on the proposed regulations lasts 60 days, closing on Oct. 4, 2004. Final rules are expected to be issued early in 2005. Enrollment for the new Prescription drug plans will begin in the fall of 2005 for benefits starting in on Jan. 1, 2006.

CMS and many organizations involved in health care and Medicare will be hosting meetings all across the country to gather information and comments until the comment period closes on Oct. 2, 2004. CMS will also host a series of national phone calls for additional comment, input and information. Comments can also be sent electronically to www.cms.hhs.gov/regulations/ecomments.

A fact sheet and other information on this new rule is available at www.cms.hhs.gov/medicarereform.