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Q & A

Published January 13, 2007


Medicare Part D

What is Medicare Part D?

It is the government's prescription drug plan for seniors, started in 2006. Medicare beneficiaries can enroll in Medicare Advantage plans, which cover both medical and drug expenses, or standalone drug plans.

Who runs the plans?

Private insurers, who receive a set fee per member per month from the federal government. Insurers' profits are the difference between revenues, including member premiums and copays, and the cost of services.

How much did the Medicare drug plan cost in 2006?

The new benefit cost an estimated $30-billion last year.

How many people are eligible?

There are 43-million Medicare beneficiaries nationwide, with 3-million in Florida. Floridians can chose from 43 standalone drug plans and 37 Medicare Advantage plans.

What did the House do Friday?

It repealed a provision that prohibited Medicare from negotiating drug prices with manufacturers and required government officials to press for lower prices. So far, each insurance company has negotiated drug prices for its own Medicare drug plan.

What happens next?

If the Senate approves the change, it will undoubtedly be blocked by a presidential veto. President Bush has said he believes the private market, through competition, can drive drug prices lower without government involvement.

Who's right?

We may never know. Proponents of giving Medicare negotiating power say the Department of Veterans Affairs, which negotiates drug prices for 4.4-million veterans, wins substantially lower prices on many drugs than Medicare pays. Opponents say that the VA offers a limited number of discounted drugs and distributes them mainly through the mail and that neither option would be acceptable to Medicare beneficiaries.

Doesn't Medicare already negotiate prices with other health care providers?

Medicare has long set the rates it will pay for everything from doctor's services to hospital stays. Opponents fear extending that power to drugs would lead to price controls that would limit innovation. Proponents say the Medicare drug program has resulted in record profits for drug companies.


[Last modified January 13, 2007, 01:11:07]

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