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Medicare Surprise: Law Bars Medigap Coverage for Drugs

  • December 8th, 2003

A little-noticed provision of the Medicare bill signed into law today by President Bush forbids beneficiaries from buying insurance to cover their share of prescription drug costs, according to an article in The New York Times. Although the new Medicare drug benefit contains yawning coverage gaps, the law prohibits the sale of any Medigap policy that would help pay drug costs after Jan. 1, 2006, when the benefit becomes available.

According to the Times, lawmakers wanted to be sure that beneficiaries would bear some of the cost to discourage individuals from buying too many medications.

This seems hardly a danger under the new law. The drug benefit contains the notorious "doughnut hole" '“ Medicare will pay 75 percent of drug costs up to $2,250, but then will pay nothing until beneficiaries have spent another $2,850 of their own money. In addition, the Medicare benefit will by no means cover all drugs, meaning that some whose drugs are currently covered by a Medigap policy will lose coverage if they switch to the Medicare drug benefit.

Three of the 10 Medigap policies cover drugs. After 2006, it will be against the law to buy a Medigap plan covering drugs if the beneficiary opts to receive the Medicare drug benefit. Those who choose not to take advantage o the new drug benefit may continue to receive drug coverage from an existing Medigap policy.

"Many seniors and disabled people will face a huge gap in drug coverage," said Gail E. Shearer, a health policy analyst at Consumers Union. "In a bill that's marketed as providing choice to consumers, comprehensive drug coverage is not really an option. That's a disappointment."

For the complete New York Times article, go to: http://www.nytimes.com/2003/12/07/politics/07MEDI.html (Free registration required and article may no longer be available.)

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Last Modified: 12/08/2003

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