How beneficiaries fare under the new Medicare drug bill

Abstract

The Medicare Prescription Drug Improvement and Modernization Act (MMA) provides the largest benefit expansion in Medicare's history while enacting major changes to the program's structure. Offering $410 billion in new drug benefits will certainly help many beneficiaries now struggling with the costs of prescriptions, particularly those with low incomes. It is difficult to determine, however, whether beneficiaries will be better off in the long run. The drug benefits will not grow with the needs of beneficiaries, and other changes that prove to be unworkable or that place some beneficiaries at risk will create added costs. In the meantime, favorable treatment of private plans will create new inequities. Additional legislation and carefully crafted regulations could mitigate a number of these issues; in the meantime, they will require close scrutiny.