Medicare Part D: A Success Story


Created in the Medicare Modernization Act (MMA) of 2003, and formally implemented in 2006, Medicare Part D provides affordable access to outpatient prescription drug coverage for seniors and people living with disabilities.

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Proposals to fundamentally alter the structure of Medicare Part D could jeopardize access to affordable prescription drug coverage for seniors and people living with disabilities, causing more harm than good.

Take a look at what is being said about harmful proposals to change the structure of the Part D program.

Compare drug coverage before and after the implementation of Medicare Part D. Part D expanded coverage to millions of seniors who previously didn’t have access to comprehensive drug coverage.

Last week we talked about 3 reasons why Medicare Part D is a success. This week, we’re switching gears to talk about Medicare Part B. Here are 3 things to know about Medicare Part B.

Benefit to Patients

By increasing access to needed medicines, Part D helps improve beneficiaries’ overall health and reduce the use of other costly and avoidable health care services, such as hospitalizations. For example, Part D coverage was linked to an 8 percent decrease in hospital admissions for seniors, according to a 2014 National Bureau of Economic Research study. Gaining Part D coverage also improved adherence among enrollees with congestive heart failure, which led to over $2.3 billion in annual savings to Medicare, driven by reductions in Parts A and B expenditures. Additionally, Medicare beneficiaries have enjoyed relatively stable average monthly Part D premiums (just $32 in 2015 – up just $1 from 2014), which helps keeps coverage affordable.

Success of the Program

Part D has succeeded beyond expectations, delivering needed prescription medicines at a far lower cost than anticipated due to rigorous competition in the program. According to figures from the Congressional Budget Office (CBO), total program costs are $349 billion (or 45 percent) less than initial 2004-2013 projections. And in 2014, Part D represented just 10.9 percent of total Medicare spending. Another testament to the program's success: about 90 percent or more of beneficiaries are satisfied with the program (source: MedPAC, Medicare Today).

Competition and Choice

The Part D program is unique in that private plans submit competitive bids each year to determine the cost of the benefit, rather than government-set pricing. Private Part D plans compete to deliver affordable coverage for beneficiaries while also providing value for taxpayers. Medicare Part D plans also negotiate significant discounts and rebates with drug manufacturers to achieve savings on medicines, and use them to help reduce premiums, deductibles and cost-sharing for beneficiaries. With a wide range of available plans – more than 1,000 plans available nationwide, with an average of 24 plans to choose from in every region in 2015 – beneficiaries can choose a plan that best meets their individual coverage and financial needs and, in turn, they are better able to adhere to prescribed treatment regimens.