HR3590 Health Care Bill & Government Health Insurance

One of the issues that the Patient Protection and Affordable Care Act will hopefully address is the coverage gap of the Medicare Part D program. Medicare Part D, which was enacted as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, is a federal program the subsidizes costs of prescription drugs for Medicare beneficiaries.

The first provision that can be enjoyed within the year is that of a cash rebate. Part D beneficiaries are eligible for a $250 rebate on their expenses for brand-name prescription medicines; while they are still expected to pay for all of their prescription drug expenses, they will at least have $250 to cover those for brand-name medications. This rebate, however, is applicable only for the year 2010 and will be discontinued afterwards.

Another provision specific to Part D beneficiaries is a discount program on prescription drugs. Drug manufacturers are expected to enter into agreements with the Department of Health and Human Services, where they will be required to give eligible beneficiaries access to discounted prices for drugs covered by the Part D program, such as brand-name prescription drugs included in the beneficiary’s drug plan.

There will also be a federal subsidy for brand name drugs, which will be provided on top of whatever discounts are applicable in the discount program. The goal is to decrease the coinsurance rate of a beneficiary in the coverage gap from 100% to 75%, and this will be done by gradually phasing in the federal subsidy starting in 2013. The subsidy will increase incrementally until it reaches 25% by 2020.