Two-thirds of nursing home residents are dually-eligible for Medicare and Medicaid. Under Part D, they have no out-of-pocket costs, such as for copayments, for any calendar month they are in a skilled nursing facility. Dual-eligible residents in nursing homes, who do not choose a Part D plan, will be assigned to one by CMS; they will have no out-of-pocket costs. Residents in nursing homes who receive Medicare premium assistance through the Medicare Savings Program (MSP) will be auto-enrolled in a Part D plan if they do not select one. MSP beneficiaries as well as other Medicare beneficiaries with limited income and resources are encouraged to apply for Extra Help (low-income subsidy). All nursing home residents can switch from one plan to another when they enter a nursing home, at any time during their stay and when leaving. Private pay residents in nursing homes currently pay out-of-pocket or with private insurance for their prescription drugs. They must decide if they want to enroll in a Medicare Part D plan and, if so, which one. They are not automatically enrolled, and they are subject to the late enrollment penalty if they fail to enroll for Part D when they first become eligible. Like all nursing home residents, they can switch plans at any time.

Nursing home residents whose care is being covered by Medicare Part A — skilled nursing and rehabilitation — receive their prescription drugs as part of Medicare’s prospective payment to skilled nursing facilities. There is a daily copayment for stays beyond 20 days but no separate charge for prescription drugs. This did not change with the implementation of Medicare Part D.