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Medicare Drug Participants Won't Lose Coverage Immediately Under New Policy

  • April 27th, 2006

The federal government has issued a new policy designed to protect Medicare prescription drug program participants from suddenly losing drug coverage. Under the Medicare prescription drug program, drug companies can drop coverage for drugs whenever they want. According to the new policy, issued April 26, 2006, if a company drops coverage for a drug, it must continue to cover participants currently taking that drug until the end of the year. There are some exceptions -- for example, if the drug is determined to be unsafe, or a lower-cost generic drug comes on the market.

The new policy addresses one of the common criticisms of the Medicare drug benefit and is designed to ensure stability. Critics complained that drug companies could drop drugs at any time, while policyholders were locked into a plan for a full year.

For more information on the new policy, click here.

In related news, two new surveys indicate that the Medicare prescription drug program has actually increased drug costs for 1 in 5 participants. A Kaiser Family Foundation poll taken April 6-11, 2006, found 55 percent of participants said the program would save them money while 19 percent said it would cost more and 19 percent said they would break even. Similarly, a KRC Research poll taken March 15-20 found 59 percent of participants saved money, but 23 percent did not.

Many whose costs increased are low-income participants who were moved from state Medicaid plans where they did not have to pay any premiums. Others include people who got drugs for free or at reduced cost from drug companies or state programs, people who had less expensive employer retiree coverage, and people with little or no current drug expenses.

For more information on the surveys, click here.

Local Elder Law Attorneys in Ashburn, VA

Margaret O'Reilly

Margaret A. O'Reilly, PC
Herndon, VA

John Laster

Law Offices of John L. Laster
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Ron Landsman

Ron M. Landsman, P.A.
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Last Modified: 04/27/2006

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