Medicare Part D plans have the option of offering coverage that appears different from the standard benefit defined by Congress in the Medicare Modernization Act, but actually provides the same benefit. In this way, Part D plans can make the prescription drug benefit more understandable and potentially increase the amount of participation, especially in the senior population. This is considered “actuarial equivalence,” and the Centers for Medicare & Medicaid Services expects that most Part D plans will use equivalent program designs as a substitute for the defined standard benefit.
For example, under the standard benefit, beneficiaries must pay a coinsurance of 25 percent for all drugs after meeting their deductible. An “actuarially equivalent” design might have tiered copayments for generic, preferred brand-name drugs, and non-preferred brand-name drugs.
All other elements of the benefit design such as deductible would be the same as the standard Part D benefit. Although the same total number of prescriptions would be filled under both designs, the number of generic, preferred brand-name, and non-preferred brand-name drugs would be different.
These differences in utilization for each tier would allow plan sponsors to obtain volume discounts from drug manufacturers and would lead to cost differences per prescription for the Part D plan. While a beneficiary might pay more or less than 25 percent of the drug cost per prescription, on average, all beneficiaries would pay 25 percent of the total cost to the plan sponsor for the drugs they receive.
Your Medicare patients will have numerous plan options to consider when enrollment begins Nov. 15. It is likely that no two plans will look the same. The most accurate way to obtain plan option information in your region is via the Medicare Web site (www.medicare.gov) or 1-800-MEDICARE.
The above Medicare Rx Byte was excerpted from Medicare 2006: A Pharmacist's Reference Guide. Stay tuned to NCPA's Web site for more information on this upcoming publication.