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Beneficiaries with chronic conditions still face high costs under new Medicare drug law

New York City, June 1, 2004--The new Medicare prescription drug law will provide much-needed help to many, especially beneficiaries with low incomes, but it's unclear whether most patients will benefit in the long run, a new Commonwealth Fund report says.

The drug benefits provided under the measure will not grow with beneficiaries' needs, and other program changes that could prove unworkable or place some beneficiaries at risk will create added costs, the report says. In the meantime, reliance on standalone private drug plans could saddle beneficiaries remaining in traditional Medicare with higher costs.

In How Beneficiaries Fare Under the New Medicare Drug Bill, Marilyn Moon of the American Institutes for Research analyzes the complexities of the Medicare Prescription Drug Improvement and Modernization Act (MMA), highlighting potential pitfalls for beneficiaries. The lack of aid for those with incomes just over the limit for low-income assistance will need close monitoring to determine their effect on beneficiaries over time, Moon says. Additional legislation and carefully crafted regulations will be key to ensuring the success of the benefit, she concludes.

"The MMA is the largest benefit expansion in Medicare's history, and creates major changes in the program's structure," said Moon. "There is a great deal of uncertainty about whether the benefit is well-designed to provide beneficiaries with access to needed medications while providing protection from high out-of-pocket costs."

Chronically Ill Will Bear Greatest Burden of Coverage Gap
About two in five (42%) Medicare beneficiaries have drug expenditures of more than $2,251 a year and will therefore be affected by the coverage gap, or "donut hole," that occurs between $2,251 and $5,100 in total drug spending.

Many affected by the gap are expected to be those with chronic conditions: about three-fourths of Medicare beneficiaries have two or more chronic cond
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Contact: Mary Mahon
mm@cmwf.org
212-606-3853
Commonwealth Fund
1-Jun-2004


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