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Frequently Asked Questions on the Medicare Prescription Drug Benefit (Part D)
Since 2006, a privatized Medicare prescription drug program has been offered to seniors. The  Part D program provides drug coverage through numerous private insurance companies and  sets prices based on competition among the plans. Unfortunately, seniors face a complex and
confusing array of choices in this program, making it difficult to identify plans that offer the best value. Due to the difficulty involved in comparing plan offerings year after year, only a small percentage of beneficiaries change plans, which undermines market competition.

For many years, the National Committee to Preserve Social Security and Medicare has advocated for the provision of universal prescription drug coverage through the Original Medicare program. This approach would provide seniors a simple, familiar benefit, and it would harness the combined purchasing power of all Medicare beneficiaries to contain the high cost of prescription drugs. We also support Part D legislation that would allow the federal government to negotiate with drug companies for lower prices, restore drug manufacturer rebates (discounts) for coverage
provided to low-income beneficiaries, prohibit “pay-for-delay” agreements between brand name and generic pharmaceutical companies that delay entry of generic drugs into the market and promote faster development of generic versions of biologic drugs.

The National Committee continues to advocate for improving the existing Part D program for beneficiaries as well. In 2010, the National Committee and allied organizations successfully advocated for a major improvement in the Part D program — the elimination of the “donut hole”
coverage gap. The donut hole requires beneficiaries to cover 100 percent of their drug expenses after a threshold is reached ($2,850 in 2014), and it exposes seniors with long-term illnesses to substantial and unusual costs. The health reform law, the Affordable Care Act, will phase out
the donut hole by 2020. For 2014, a 52.5 percent discount on brand-name drugs will be applied at the pharmacy, as well as a 28 percent reduction for generic drugs for beneficiaries in the donut hole. The Affordable Care Act also made improvements to the Part D enrollment process and in benefits for beneficiaries with substantial care needs.

However, many more improvements are needed. Seniors are given only seven weeks each year to make difficult decisions about their prescription drug coverage, and they are then locked into the plans they select for an entire year. This year’s Annual Coordinated Election Period
(ACEP) begins on October 15, 2013 and lasts until December 7, 2013. It is only during this open enrollment period that most seniors are permitted to enroll in a Part D plan, drop Part D coverage or switch to a different plan. While most seniors will be locked into the plans they select for all of 2014, plans are allowed to make significant changes to their prices, formulary and benefits.

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