Crs Report for Congress: Medicare: Beneficiary Cost-Sharing Under Prescription Drug Legislation: July 25, 2003 - Rl31525

In late June 2003, both the Senate and the House passed legislation to add a prescription drug benefit to the Medicare program. Although the Prescription Drug and Medicare Improvement Act of 2003 (S. 1) and the Medicare Prescription Drug and Modernization Act of 2003 (H.R. 1) have many differences, the structure of the proposed standard prescription drug coverage is similar. This report provides an analysis of how the cost-sharing and premium provisions under each bill would affect the amount that a beneficiary would pay annually for prescription drugs. Each of these proposals has a different form of cost-sharing (that is, the share of an enrollee's drug costs that is not paid by the Medicare prescription drug plan). Under S. 1, the plan would pay 50% of drug costs after the enrollee paid the $275 deductible (in 2006). After $4,500 in total drug spending (the "coverage limit"), the enrollee would pay for all prescription drug spending until reaching the $3,700 "true" out-of-pocket maximum (that is, cost-sharing amounts excluding those paid on behalf of the enrollee by private health insurance). This occurs when the total spending on prescription drugs exceeds $5,813, assuming none of the cost-sharing is paid for by private insurance. ...