Navigate Up
Sign In

The Medicare Prescription Drug Improvement and Modernization Act of 2003

The Medicare Prescription Drug Improvement and Modernization Act of 2003 (Medicare Part D) is a voluntary prescription drug benefit for Medicare beneficiaries that was enacted on December 8, 2003.

The Medicare Part D program is governed by CMS (Centers for Medicare and Medicaid Services) and will be implemented by private companies called "Prescription Drug Plans" (PDPs). To be eligible for this plan, one must have Medicare A and/or B, which is the only criteria necessary to enroll. The United States is divided into 34 regions and will have at least two PDPs in each region. As its own region, Ohio has been delegated as Region 14. These PDPs were approved and awarded by CMS in September, 2005, and they will each have their own unique formularies, premiums, and management tools. Every PDP also had the opportunity to have more than one plan within its network; for example, Ohio has 17 PDPs that will offer a total of 48 different plan choices.

Dual eligibles, people with Medicare and Medicaid coverage, will be automatically enrolled into one of the "Benchmark" PDPs in October, as Medicaid will no longer cover prescription benefits for these people. PMG is moving forward with a strong, broad portfolio of both PDPs and Benchmark PDPs, which will allow their customers a wide variety of plan choices. Duals will be notified by CMS as to which plan they have been auto–enrolled before November 14, 2005. Duals can opt out of their assigned PDP and choose their own Benchmark PDP between November 15 and December 31, 2005. If a dual eligible in a nursing facility is enrolled into a plan, or chooses a plan that the facility’s provider pharmacy is not contracted with, then that facility could have multiple long–term care pharmacies delivering medications causing many operational problems within that facility. Hence, the broader the portfolio of your pharmacy provider, the smoother the process will be. During this time period of auto–enrollment and implementation of the Part D program on January 1, 2006, it is crucial to have a great working relationship with an open line of communication with your pharmacy.

Every PDP must offer the Standard Part D plan, but they can also offer more enticing plans that will have higher premiums. The national average premium for the standard plan is $32/mo. The Medicare Part D prescription drug plan is a voluntary plan for nondual eligibles and will have an enrollment period of November 15, 2005 to May 15, 2006. If a non–dual beneficiary does not enroll by May 15, 2006, they will face a 1 percent lifetime monthly premium penalty.

Standard Part D Plan:

  • Step 1: $250 annual deductible
  • Step 2: 25 percent copay until total drug costs reach $2,250 for the year
  • Step 3: "Doughnut Hole" — 100 percent copay until total drug costs reach $5,100 for the year
  • Step 4: "Catastrophic Level" — 5 percent copay with no ceiling

There are additional subsidies offered to beneficiaries that meet certain income level criteria. The Social Security Administration determines this coverage by performing an asset and means test for enrollees. Applications are available through your local Social Security Administration Office.

For non-dual eligibles that have a prescription plan through a private plan, such as a former employer or union, there must be a comparison of their current plan versus the PDP to determine if there will be benefit. Again, close communication between facilities and their pharmacy provider is crucial to assist all residents in determining the proper choice of prescription coverage

Contact Us