New Benefits for Medicare Beneficiaries

Armen Hareyan's picture

The recently enacted prescription drug benefit will help Medicare beneficiaries in several ways.

The benefit provides access to discounted prescription drugs. Under the fully implemented benefit, those who now pay full retail prices could see their prescription drug prices reduced by an estimated 20 percent or more.1 In addition, their overall out-of-pocket drug spending could fall by about 50 percent or more-in exchange for a premium of about $35 per month in 2006.

It provides catastrophic protection for all seniors and those with disabilities who have high out-of-pocket prescription drug expenses. A $2, $5, or 5 percent coinsurance amount per prescription will be required once a beneficiary accumulates $3,600 in out-of-pocket prescription drug spending.

It provides additional coverage for millions of Medicare beneficiaries of limited means and with incomes below 150 percent of the federal poverty level. Those of limited means and with incomes below 135 percent of poverty will pay no monthly premium, no deductible, and only $1 to $5 per prescription in cost-sharing, while those of limited means and with incomes between 135 percent and 150 percent of poverty, will pay reduced premiums, a significantly reduced deductible of $50, and reduced cost-sharing.2

It provides a prescription drug discount card program and immediate assistance of $600 for those individuals with limited savings and low-incomes who do not have other coverage.


It provides savings for states and better coordination of care for Medicare beneficiaries who also qualify for Medicaid.


1 Calculation assumes 20 percent savings, on average, for the fully implemented benefit through a combination of management techniques. CMS Office of the Actuary.

2 In 2006, 150 percent of poverty would correspond to about $14,000 in annual income for a single individual and about $19,000 for a couple. 135 percent of poverty would be about $13,000 for singles and $17,000 for couples. Projection of 2003 Federal Poverty Levels.


The source of this release is


Please, click to subscribe to our Youtube Channel to be notified about upcoming health and food tips.